Dive Brief:
- Blue Cross and Blue Shield of North Carolina, the state's leading health insurer, has experienced its first financial loss in 15 years and attributes it to costs associated with the Affordable Care Act.
- While 2014's new enrollees increased the insurer's membership and revenue, medical claims rose by $1.4 billion from 2013 to 2014 and outpaced that revenue. BCBSNC also had to pay $156 million to cover ACA-related fees, the company reports. It also named new losses associated with reduced Medicare reimbursements and higher IT costs.
- The insurer posted a loss of $50.6 million for 2014 versus a net income of $92.6 million in 2013. As the News and Observer notes, this is the first annual loss for the company since 1999.
Dive Insight:
Although their 2014 results were a disappointment, they were not a surprise, says BCBSNC's Gerald Petkau, senior vice president and chief financial officer. "As a general rule, ACA customers were older and sicker and drove costs higher than we had anticipated," Petkau told the News & Observer.
The company emphasizes that 2014 was a year of unprecedented change and that its reserves kept it strong. It says it is well positioned for the future thanks to "investments in systems and technology that will bring new efficiencies to manage healthcare costs."
The News & Observer notes the company's losses were reflected in the compensation of some of the organization's top executives. While six executives received lower compensation, four received pay raises.