Blue Cross Blue Shield of Michigan reports $360 million profit for 2021; CEO made $15.6 million – Detroit News
Blue Cross Blue Shield of Michigan reported net income of $360 million for 2021 despite an operating loss of $374 million largely for its health insurance business due to the ongoing costs of the COVID-19 pandemic, officials said Tuesday.
The net income, about 1% of the insurer’s $32.5 billion in revenue, was a result of strong gains in its investment portfolio and profits from non-health lines of insurance business, officials said during the company’s annual financials briefing.
“… the diversification of the Blue Cross enterprise clearly paid dividends for our health insurance customers as we were able to absorb the extraordinary costs of the COVID pandemic without factoring those costs into the premiums paid by our insured customers,” said Andrew Hetzel, vice president for corporate communications with Blue Cross Blue Shield of Michigan.
In 2021, the state’s largest health insurer said it dedicated $860 million to customers and health care providers to pay for COVID-related expenses, including treatment and testing, without increasing health insurance premiums.
“The strong performance of our subsidiaries and investments enabled us to support our members, while also managing a small positive margin to advance our business,” BCBSM President and CEO Daniel J. Loepp said in a statement Tuesday.
Officials said Loepp received total compensation of $15,682,571 in 2021, up from $11.5 million in 2020. This includes a base salary of $1,632,550, a bonus of $12,463,460 and other compensation of $1,586,561.
“Overall, the consistently strong performance of the company under Mr. Loepp’s leadership is reflected in his total compensation,” Hetzel said. “In 2020 and 2021, he led the BCBSM enterprise through the earliest stages of the COVID pandemic, ensuring that we were able to proactively support our members, customers and providers while continuing to manage good financial performance, maintain stable health plan membership and solidify our good credit rating.”
The company maintained its Best’s Rating Report of A with a stable outlook.
“This is good news for our customers and other stakeholders as it points to a well-managed nonprofit mutual that is successfully weathering the economic and financial pressures brought on by the COVID pandemic,” said Paul Mozak, senior vice president of finance and chief risk officer for Blue Cross.
Blue Cross Blue Shield of Michigan will pay $100 million to the nonprofit Michigan Health Endowment Fund, which helps protect vulnerable people in Michigan by subsidizing Medigap coverage, Mozak said.
Officials also said Tuesday that Blue Cross Complete of Michigan’s nationwide health insurance membership was 5,281,292 at the end of 2021, a slight decline of 64,000 members, about 1%. The company attributed this mostly to losses related to COVID-19’s impact on the economy.
Its membership in individual plans decreased by about 2,000 members to 168,064 as of January 2022.
Membership for Medicare Advantage grew in 2021 by 12,308 to 603,657.
Blue Cross Complete of Michigan gained more than 34,000 members in 2021 and has 323,816 members.
Small group membership grew by about 7,000 members in 2021 to 302,204.
cwilliams@detroitnews.com
Twitter: @CWilliams_DN
