Excellus net income rebounds in 2024 despite operating loss

ROCHESTER — Excellus BlueCross BlueShield says the health plan ended 2024 with a profit of $25.6 million, citing its annual report filed with the New York State Department of Financial Services on March 1. “While the health plan last year faced several challenges, stronger-than-expected investment results helped the insurer reach a small net margin of 0.4 percent, or $25.6 million,” per the Excellus fact sheet about its 2024 financial performance. That allowed Excellus to overcome its 2024 operating loss of $163 million (or 2.5 percent) on $6.5 billion in premium revenue. The 2024 profit figure was an improvement from a net loss of $23.2 million at the end of 2023. In 2022, Excellus reported net income of $58.9 million on $6.6 billion in premium revenue in 2022. “Health insurers nationwide continue to experience significant increases in the cost and demand for health care, and Excellus BlueCross BlueShield is impacted by these trends across upstate New York as well,” the health insurer said to open its fact sheet. The health plan spent $6 billion in 2024 — or about $16 million daily — on medical and drug benefits for its members. Rochester–based Excellus is Central New York’s largest health insurer. The health plan and its parent organization employ about 4,500 people across upstate New York.

Medicare Advantage

For the second year in a row, high claims payments and a change in how the federal government sets hospital reimbursement rates for Medicare have “financially impacted” Excellus. The change to the Medicare wage index resulted in Excellus reimbursing hospitals in 2024 over $100 million more for Medicare Advantage members without a corresponding premium increase in government funding. The health plan’s Medicare Advantage products overall lost more than $200 million last year due to both wage-index changes and health-care cost increases, Excellus said.

Premium dollars

The nonprofit Excellus in 2024 spent 92 cents out of every premium dollar collected on health care for its members. Over the last 20 years, the health plan has averaged a net margin of 1.6 percent, it says. With 92 cents of every premium dollar spent on patient care, the remainder of every dollar is primarily spent on taxes and operating expenses, including expenses related to employees, customer service, claims processing, and IT (information-technology) infrastructure.

Reserves and taxes

Excellus says its reserves were $1.7 billion at the end of 2024, or the equivalent of 91 days of claims and operating expenses. Reserves are like a savings account to be drawn upon for unforeseen higher expenses such as a pandemic. Excellus reported that it paid $461.3 million in 2024 in federal and state taxes and fees, an increase of 5 percent over the prior year, per its fact sheet.