• BCBSNC ramped up investments in technology and infrastructure as the company prepared for the full implementation of health reform in 2014.
  • Membership grew by over 140,000 to 3.74 million customers in North Carolina.
  • 87 cents of every premium dollar spent on medical care; up from 85 cents in 2011. 
  • Net income margin of 1 percent due to investments for health care reform and higher medical expenses.
CHAPEL HILL, N.C. – Blue Cross and Blue Shield of North Carolina (BCBSNC) ended 2012 with more customers and less profit than in 2011. Increased investments in technology and infrastructure necessary to prepare for health care reform combined with increased medical claims pushed BCBSNC’s net income ratio to 1 percent.
“2012 was a year of focus on the future and the full implementation of health reform,” said Brad Wilson BCBSNC president and CEO. “We are making investments today to ensure we can meet North Carolinians’ health care needs tomorrow.” 
Financial Results*
$5.7 billion
$5.5 billion
Consolidated Net Income
$57.7 million
$177.1 million
Net Income Ratio
1 percent
3.2 percent
Taxes(Federal, State, Local)
$92.1 million
$160.2 million
Claims and Medical Expenses
$4.5 billion
$4.2 billion
Medical Care Ratio
87 percent
85 percent
Months in Reserve
4.7 months
4.5 months
Membership (including Blue Card®)
3.7 million
3.6 million
*Financial results, excluding months in reserve, are GAAP consolidated results.
The primary factors contributing to lower net income were significantly higher medical claims expenses and continued investments in technology and infrastructure dedicated to implementing the Affordable Care Act.
Claims and medical expenses were $4.5 billion last year, an increase of 8.4 percent. Revenues increased 4.1 percent to $5.7 billion in 2012.  As a fully-taxed company, BCBSNC incurred over $92 million in local, state and federal taxes in 2012. 
Medical trend for fully insured members was up from last year at 5.2 percent. Procedures that led medical expense trends were preventive medicine visits, knee and hip replacements, and specialty pharmacy. In addition, there was a sharp increase in claims related to flu-related office visits and ER visits.
During 2012, BCBSNC spent 87 cents per premium dollar on the medical care of its customers.  Most of the remainder of the premium dollar went toward Customer Service and information technology. The company made investments in technology such as the creation of Topaz Shared Services for enrollment, billing and claims processing. BCBSNC and SAS announced a program to develop new analytic tools that will help health plans provide better, more personalized care and service to customers while holding costs down.
In an effort to improve health care delivery, the company invested in Fast Med Urgent Care, teamed up with physicians and hospitals statewide to create Accountable Care Organizations, and launched Carolina Advanced Health in Durham, N.C., a state-of-the-art patient-centered medical home in collaboration with UNC Health Care. BCBSNC also launched two lower-cost products to better meet the needs of cost-conscious health care consumers:  Blue SelectSM and Blue ValueSM.
The company’s overall membership grew this past year to exceed 3.7 million. This includes over 1.0 million members served on behalf of other Blue plans.
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 1 million served on behalf of other Blue Plans. For 79 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 was named one of the World’s Most Ethical Companies by Ethisphere Institute in 2012. Blue Cross and Blue Shield of North Carolina is an independent licensee of the Blue Cross and Blue Shield Association. Visit BCBSNC online at bcbsnc.com.