According to a statement from BCBS Michigan shared with Becker’s, the eliminated positions were across several divisions of the company. BCBS Michigan has more than 10,000 employees.
The Detroit-based insurer reported a $544 million underwriting loss in 2023. Medical costs in 2023 were $3.2 billion higher than in 2022.
In its statement, BCBS Michigan said rising expenses are driven by increasing costs for expensive drugs and higher-than-expected utilization of medical care.
BCBS Michigan reported its pharmaceutical costs increased by $1.8 billion in 2023, including a $350 million increase in GLP-1 drug costs and a $750 million increase in specialty drug costs.
In June, BCBS Michigan said it would no longer cover GLP-1 drugs for weight loss in its commercial plans.
“Our company sits in an uncomfortable position between two extraordinary pressures — the skyrocketing increase in health care costs and the desire of our customers to maintain the affordability of their health insurance plans,” Blue Cross Blue Shield of Michigan said. “We owe it to our customers to take actions to address our cost of doing business.”
BCBS Michigan said the cost pressures it is facing are an industrywide issue.
At least 16 other payers have laid off employees in 2024.
“Working within our organization to become more efficient and manage our cost of doing business, we will do more to ensure health insurance affordability, and the security and peace of mind that comes with it, for our members and customers,” BCBS Michigan said.
