Excellus BlueCross BlueShield finished last year with a net loss of $23 million — the first time since 2008 that the region’s largest insurer closed out a year in the red.
The Rochester-based health plan attributed its losses to continued increases in medical benefits being paid out.
“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,” Excellus President and CEO Jim Reed said in a news release.
This marked the second straight year of significant declines in the company’s net income. Company profits dropped 50% in 2022, from $117.6 million down to $58.9 million.
Excellus last failed to post a profit in 2008, when it ended the year with a net loss of $54 million.
The company’s $6.6 billion in premiums collected in 2023, was unchanged from the prior year. The $6.2 billion in benefits paid surpassed the previous year’s record by more than $270 million, records show.
According to Excellus:
- 93 cents of every premium dollar went to medical care in 2023.
- Of that, 69 cents went to hospitals and doctors; 14 cents paid for prescription medication and 6 cents went for ER visits, labs, ambulance and related professional services. The remaining 4 cents was listed as “other medical costs.”
Reserves fell slightly. And taxes inched upward to $440 million, according to the nonprofit’s annual report filed Friday with the state Department of Financial Services.
“We’re a company that budgets for thin financial margins,” Reed said, “and giving ourselves such a narrow window can sometimes result in a small net loss when facing the unexpected.”
Reed's total compensation topped $3.5 million last year — most of that in bonus pay and other compensation. Overall compensation for Excellus’ 10 highest-paid executives increased by 41%.
Executive compensation is set by the company’s board of directors based on comparable market data and performance, officials said.
Asked about the bonus pay, a spokesperson said those were tied to corporate and performance goals met in the prior three years of 2020-22, and that the company continues "to maintain a strong financial position and balance sheet.”
Reed to the reins in May 2021, and had served as president and CEO-elect since July 2020. He has been with the company since 1996.
Excellus has a total membership of 1.5 million and along with its parent company, The Lifetime Healthcare Cos. employs more than 4,000 people across upstate New York.
