By Mark Tosczak
The state’s largest health insurer reported its first-ever profits on plans it offers under the Affordable Care Act for 2017 after years of losing money on them.
Blue Cross and Blue Shield of North Carolina said it earned pre-tax profits of $734 million on total revenue of $9.4 billion in 2017. Blue Cross is a nonprofit company, but it still pays local, state and federal taxes, which ate up $511.5 million of the profits.
The company said this is the first year since 2013 that it broke even on ACA selling plans. Overall, other plans sold by the company had slightly higher profits.
Other Blue Cross and Blue Shield companies across the country also started reporting stronger financial results last year for their ACA plans.
Blue Cross and Blue Shield said it benefited from lower-than-expected health care costs from its members and from competitors Aetna and United Healthcare exiting the ACA marketplace, giving the company about 200,000 new customers and making it the only insurer offering ACA plans in all 100 counties.
The company also said that tax savings it expected from a major federal tax overhaul passed in late 2017 would be used to lower premium increases for 2019; those rates will be decided later this year.[sponsor]
Durham-based Blue Cross has covered some 3.8 million North Carolinians under various plans. More than 500,000 people are covered under ACA plans, about 15 percent of beneficiaries, the company says.
But despite the profits, the company said it expected the health costs to continue to rise and for uncertainty and volatility to be the order of the day for health insurers.
“Last year we saw changes to two key provisions of the ACA, eliminating Cost Sharing Reduction payments and dropping enforcement of the individual mandate,” Mitch Perry, the company’s chief financial officer, said in a news release. “The longer-term effects of these decisions and ongoing uncertainty in Washington will likely lead to continued volatility.”