ROCHESTER, N.Y. — Excellus BlueCross BlueShield says it ended 2023 with a net loss of $23.2 million. Excellus, Central New York’s largest health insurer, reported the net-loss figure in its annual report filed Friday with the New York State Department of Financial Services. The 2023 net loss compares to the reported net income of $58.9 […]
ROCHESTER, N.Y. — Excellus BlueCross BlueShield says it ended 2023 with a net loss of $23.2 million. Excellus, Central New York’s largest health insurer, reported the net-loss figure in its annual report filed Friday with the New York State Department of Financial Services.
The 2023 net loss compares to the reported net income of $58.9 million on $6.6 billion in premium revenue in 2022. The 2022 net-income figure had declined 50 percent from the $117.6 million the health insurer generated in 2021.
In its Friday announcement, Excellus says it received $6.6 billion in premium revenue in 2023 and spent $6.2 billion in medical benefits for its 1.5 million members.
The Rochester–based health plan attributes the 2023 net loss primarily to a $271 million increase in medical benefits paid last year. Excellus, like other health insurers nationwide, continues to “experience increases in utilization and costs” for medical benefits and prescription drugs.
“We’re a company that budgets for thin financial margins and giving ourselves such a narrow window can sometimes result in a small net loss when facing the unexpected,”Jim Reed, president and CEO of Excellus, said in a news release. “As our communities emerge from the pandemic, we’re seeing significant increases in high-cost inpatient hospital utilization, outpatient surgeries on hips and knees, and new prescription medications.”
Medicare Advantage
A change in how the federal government sets hospital-reimbursement rates for Medicare Advantage plans has also impacted the health plan’s finances, Excellus said. An update to the Medicare wage index will bring an additional $1 billion of increased federal payments annually to upstate New York hospitals.
“We’re glad to see this increased funding for hospitals in our region,” Reed said. “Our challenge, however, is that we’re now reimbursing hospitals more for providing care to Medicare Advantage members without a corresponding increase in health plan funding for Medicare Advantage premiums from the federal government.”
Premium dollar
As a mission-driven nonprofit, Excellus says it strives for a low operating margin. Overall, the health insurer in 2023 spent 93 cents out of every premium dollar collected on direct patient care including medical and pharmacy claims, and activities that improve the quality of care. Over the last 20 years, the health plan has averaged a net margin of 1.7 percent.
Reserves and taxes
Health-plan reserves totaled $1.68 billion at the end of 2023 or the equivalent of 91 days of claims and operating expenses. Excellus says its reserves are “like a savings account to be drawn upon for unforeseen higher expenses” such as a pandemic. The health plan also incurred $441.4 million in federal and state taxes and fees in 2023.