BCBSNC 2009 Financial Results Show Stable Finances, Customer Base

  • BCBSNC affected by economy but finances, membership stable       
  • Medical spending for customers increases        
  • Profit margin declines  
CHAPEL HILL, N.C. In 2009 Blue Cross and Blue Shield of North Carolina (BCBSNC) continued to see stability in its customer base and financial performance, despite a difficult economy.  
 
“During this down economy, when many insurers have lost customers, Blue Cross is holding its own. We remain strong and viable and focused on meeting the health care needs of our customers every day,” said President and CEO Brad Wilson.  
 
BCBSNC had a net income ratio (profit margin) of 2.1 percent for 2009, equating to just 2.1 cents for each dollar of revenue. That was down from 3.6 percent in 2008 and below the company’s target range of 3.5 to 4.5 percent. The company’s profitability was affected by higher medical costs and slower membership growth due to the state’s down economy. The company’s consolidated net income was $107.3 million with total revenue at $5.2 billion.  
 
During 2009, BCBSNC spent more of every premium dollar on the medical care of its customers – nearly 87 cents per premium dollar compared to just over 85 cents in 2008. Included in the increased medical costs this year were costs associated with H1N1 and seasonal flu, as well as an investment the company made in waiving its customers’ generic drug copayments for the first six months of 2009.  Most of the remainder of the premium dollar went toward customer service and technology investments to support its products and service.  
 
For the last four years, BCBSNC has encouraged the use of generic drugs to help hold down medical costs and make it easier for consumers to afford their medications and stick to the regimen prescribed by their doctor. 
 
The use of generic prescriptions went up nearly two percentage points to approximately 68 percent from December 2008 to December 2009.  The company spent more than $4.0 billion in claims and medical expenses during the year for its insured customers, compared to $3.9 billion for 2008. The company paid a total of over $11.3 billion for both insured and self-funded customer claims. The company’s overall membership exceeded 3.7 million in 2009, which is essentially flat compared to 2008. This includes approximately 900,000 served on behalf of other Blue plans.   As a fully taxed company, BCBSNC incurred nearly $134 million in local, state and federal taxes in 2009.  
 
The company continued to rank as one of the Triangle’s top ten private employers. BCBSNC’s workforce was over 4,600 at the end of 2009.  
 
 
About Blue Cross and Blue Shield of North Carolina:
Blue Cross and Blue Shield of North Carolina is a leader in delivering innovative health care products, services and information to more than 3.7 million members, including approximately 900,000 served on behalf of other Blue Plans. For 77 years, the company has served its customers by offering health insurance at a competitive price and has served the people of North Carolina through support of community organizations, programs and events that promote good health. Blue Cross and Blue Shield of North Carolina is an independent licensee of the Blue Cross and Blue Shield Association. Access BCBSNC online at bcbsnc.com.
 
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