Medical benefits paid by Excellus BlueCross BlueShield inched higher in 2022 – breaking the previous year’s record for the highest outlay in more than two decades.
The cumulative $5.9 billion in benefits is up $1 billion over five years, according to the health plan’s annual report filed this week with the New York state Department of Financial Services.
“We remained focused on our nonprofit mission in 2022, spending more than $16.1 million every day covering our members’ health care costs,” said Jim Reed, president and CEO for the region’s largest insurer.
That daily average first was reached in 2021, with a jump in benefits attributed at the time to pent-up demand for medical care postponed during the pandemic. That is not what’s behind the sustained increase last year, however. Instead, officials point to rising drug prices.
Savings achieved through generics and other means are being “eclipsed by ... the rising cost and utilization of specialty medications, including biologics and gene therapies,” according to the health plan.
Prescription drug prices were up 5%, or $54 million, last year, reaching $1.2 billion, records show. That continued a 30% rise seen over the past four years.
COVID-related expenses for treatment, testing and vaccines totaled $320 million, up from $288 million the year before, officials said.
Company profits dropped 50% to $58.9 million, records show, attributed mainly to declines in investment income with stock market and interest rate fluctuations. The year before, Excellus had posted modest gains in net income after a sharp decline during the first year of the pandemic.
Reserves were up more than $200 million to nearly $1.8 billion.
Reed, in his first full year on the job, received $2.2 million in total compensation. He is one of four executives with total compensation of $1 million or more.
Executive compensation is set by the company’s board of directors based on comparable market data and performance. Nine cents of every premium dollar paid goes to administrative expenses.
Though a nonprofit, the health plan paid $428.5 million in federal and state taxes and fees, records show.
