Excellus BlueCross Blue Shield posted a $163 million operating loss last year yet was able to finish in the black.
The region’s largest insurer ended the year with a $25.6 million profit, rebounding from a similarly sized net loss a year ago.
That was thanks largely to stronger-than-expected investment results, driven by capital gains with high-performing stocks, according to the Rochester-based nonprofit health plan.
“Health insurers nationwide continue to experience significant increases in the cost and demand for health care,” the company said in a news release accompanying its annual report filed with the New York state Department of Financial Services that was released this week. “and Excellus BlueCross BlueShield is impacted by these trends across upstate New York as well.”
The company saw a decline in total revenue and membership, records show – at a rocky time in the market where some providers are reporting significant losses or falling profits even with record income. Total membership dropped from a previous 1.5 million to a current 1.43 million, according to the company.
But Excellus officials pointed to “increases in health care costs and changes in how the federal government sets hospital reimbursement rates for Medicare,” as the key factors that drove operating losses in 2024.
Increases in hospital and medical benefits more than offset a continued decline in spending on prescription drugs. Once a driver of benefit payouts, Excellus’ outlay on medication has fallen 29% over the past two years, totaling $865 million in 2024, as a portion of that coverage shifted to the state's Medicaid pharmacy program. But hospital and medical benefits topped $4.5 billion, while total medical benefits paid out by the health plan remained steady at $6 billion, records show.
Cancer is the top medical cost by condition, Excellus records show, accounting for $614 million of the total, an 11% increase over last year.
Excellus CEO Jim Reed’s total compensation stood at $3.95 million, up from $3.58 million a year ago. Bonuses and other payments fueled an overall 7% increase in total compensation for the company’s 10 highest-paid executives.
Bonus pay is tied to corporate and performance goals for the previous three years, 2021-23, a spokesperson said, “including member satisfaction metrics and quality scores for the health plan’s products.”
Reed took the reins in May 2021, after having served as president and CEO-elect since July 2020. He has been with the company since 1996.
"We spent 92 cents of every premium dollar collected last year on medical care for our members,” Reed said in a provided statement. “We're a nonprofit, so we don't have shareholders who are expecting a return on their investment. However, the cost of health care continues to rise and we know that many of our members and employers are struggling with the burden of these rising costs. As a part of the local health care system, we're committed to working together with our partners as we explore more ways to make health care more affordable for our communities."
Excellus along with its parent company, The Lifetime Healthcare Cos., employs more than 4,000 people across upstate New York.
The remainder of premium dollars collected go to taxes and operating expenses, including employee compensation, customer service, claims processing and IT infrastructure. The company reported spending 93 cents of every premium dollar on patient care a year ago.
Though a nonprofit, the company reportedly paid $461.3 million in federal and state taxes and fees last year – up 5% from 2023.
