DURHAM, N.C. – A strong, stable financial position allowed Blue Cross and Blue Shield of North Carolina (Blue Cross NC) to address volatility and high costs associated with the pandemic, while taking extra steps to help members get the care they need.

Membership grew by 1.3 percent, however, revenues remained flat largely due to Blue Cross NC’s Affordable Care Act (ACA) rate decrease. Net income decreased $234 million primarily due to COVID-19 related claims, premium reductions and investments to better serve its members.

At the onset of the pandemic, Blue Cross NC was one of the first insurers in the nation to put new policies into place to help members and providers, like eliminating member cost-sharing for COVID-19 screening, testing and treatment. By expanding virtual coverage, telehealth usage surged amongst members and saw more than a 7,500 percent increase in usage, which translates to $76 million spent on telehealth in 2020.

“While the pandemic dominated much of 2020, we were able to remain financially stable and act nimbly to ensure our members received the care they needed and lower premiums,” said Mitch Perry, CFO of Blue Cross NC. “Our goal is to make health care better, simpler and more affordable, and we did not let increased costs from the COVID-19 pandemic sideline that effort.”


Financial Results*




$9.9 billion

$9.9 billion

Net Income

$260.5 million

$492.0 million

Net Income Ratio

2.6 percent

5.0 percent

Taxes (Federal, State, Local)

$544.6 million

$431.3 million

Claims and Medical Expenses

$7.5 billion

$7.3 billion

Months in Reserve

5.38 months in reserve

5.24 months in reserve

Membership (including Blue Card®)

3.86 million

3.81 million


*Financial results, excluding months in reserve are GAAP results. Net income ratio calculated based on 2020 Financial Accounting Standards Board recommendations.



Blue Cross NC lowered premiums for its ACA plans for the third year in a row, leading to nearly $1 billion in cumulative savings for members over the course of three years. An important way that Blue Cross NC achieved these savings was by actively managing and reducing its operating costs in 2020 by more than $100 million. The expansion of its value-based program, Blue Premier, also contributed to cost savings.

“Sharing savings with our customers is always important, especially when so many North Carolinians are experiencing health concerns, job loss and uncertainty from the economic slowdown,” said Perry. “As a not-for-profit, Blue Cross NC does not have shareholders and our strong financial performance allows us to invest earnings directly toward lowering our customers’ out-of-pocket costs and improving services. Health care still costs too much, and we’re committed to making it more affordable.”

COVID-19 Support

Blue Cross NC provided $800 million of direct and indirect financial support to North Carolinians during the pandemic.

  • $600 million was used to help members, employers and providers in a number of ways, including to gain coverage and access to care, improve cash flow and help improve food security in communities.
  • After a favorable outcome related to the Risk Corridor lawsuit, the company issued $200 million in health and wellness retails cards. These retail cards were sent to more than 600,000 eligible members ranging in amounts from $100 to $500.

Blue Premier
Additionally, Blue Cross NC continued to expand its industry leading value-based payment program, Blue Premier, contributing to lower premiums for customers across the state. Eight major health systems are now in this program, generating cost savings, quality improvements and a slowdown in the rate of spending on health care. A new program, Accelerate to Value, expanded value-based payments by bringing more than 200 additional independent primary care practices into Blue Premier. This helps independently owned primary care physician practices remain financially viable during the pandemic.


With a larger customer base and continued price increases for medical tests, procedures and treatments, Blue Cross NC saw claims and medical expenses rise by $200 million in 2020 – from $7.3 billion in 2019 to $7.5 billion in 2020. Rising costs for specialty drugs, specifically cancer and autoimmune disease drugs, were factors, but one of the biggest cost drivers was more than $200 million in COVID-19 related claims.

While claims data shows an initial dip in claims from customers deferring care at the beginning of the pandemic, claims levels rebounded quickly by the summer, and were above normal levels by the fall. December 2020 saw the highest medical costs in a single month in Blue Cross NC’s history and the company expects volatility could continue into 2021.

The COVID-19 pandemic is driving long-term changes in how doctors and patients use and value telehealth. Blue Cross NC has covered telehealth for more than 20 years and will continue to do so after the pandemic in a way that improves health, increases access to health care and lowers costs for members.



State law requires the company to maintain reserves equal to a minimum of three months and maximum of six months of claims and administrative expenses in order to ensure financial stability for its customers. Blue Cross NC finished the year with reserves of 5.38 months.

Blue Cross NC also maintains a strong, diversified investment portfolio which allows the company to plan for the long-term and invest in new capabilities that help drive transformation.

“While we are encouraged by recent COVID-19 trends, we expect the pandemic to cause continued uncertainty in 2021,“ said Perry. “Our customers depend on us now more than ever, so it is important that we remain financially strong to help them get the care they need, when they need it, and continue investing in our members, company and communities.”


Blue Cross NC has published information related to the Coronavirus at bluecrossnc.com/coronavirus and will continue to provide updates as events warrant.

About Blue Cross and Blue Shield of North Carolina:

Blue Cross and Blue Shield of North Carolina (Blue Cross NC) is committed to making health care better, simpler and more affordable. We have been driving better health in North Carolina since 1933, working to tackle our communities’ greatest health challenges. Blue Cross NC serves its customers and communities of more than 3.86 million members, including approximately 1.1 million on behalf of other Blue Plans. Blue Cross NC is an independent licensee of the Blue Cross and Blue Shield Association. Visit Blue Cross NC online at www.bluecrossnc.com. All other marks are the property of their respective owners.