Medicare Advantage headwinds hit BCBS 

The financial headwinds facing major Medicare Advantage carriers are also affecting companies across the Blue Cross Blue Shield system.

"Our Medicare Advantage cost trends have faced the same headwinds felt across the industry," BCBS Minnesota told the Star Tribune on June 14. The insurer reported a 40% decrease in operating profits in 2023, falling from $173.2 million to $103.7 million.

In May, BCBS Kansas City said it would leave the Medicare Advantage market at the end of 2024, citing low membership that "does not provide the scale required to successfully compete in today's complex and continuously changing market."

Highmark Health, which operates BCBS affiliates in four states, noted in its first quarter financial report that its health plans continue "to navigate industry-wide headwinds related to increased utilization of medical services, primarily within the Medicare Advantage business."

The MA market is facing two major challenges: rising utilization and medical costs among older adults and reduced benchmark payments from CMS. CVS Health and Humana have said they will exit some markets in 2025 — and potentially reduce benefit offerings — to accommodate rising costs. 

Notably, executives with Elevance Health, parent of 14 BCBS companies, told investors June 12 the company is comfortable predicting "market-plus" growth for its MA business in 2025.

"If everyone's talking about membership losses, those members are going somewhere," Stephen Tanal, vice president of investor relations at Elevance, said.

In May, UnitedHealthcare said it's not planning any major shakeups to its Medicare Advantage business in 2025, citing a long-term strategy to adjust to industry pressures.

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