Blue Cross and Blue Shield of Minnesota Announces 2019 Financials

(Eagan, Minnesota) April 1, 2020 — The Blue Cross and Blue Shield of Minnesota (Blue Cross) family of companies today announced audited financial results for 2019. The organization reported an operating loss of $55 million on $13.3 billion in total revenue, for a negative operating margin of 0.4 percent. Market performance and fair-market value investment adjustments in 2019 drove a pre-tax net gain of $153.3 million. Audited results include the consolidated financial statements for businesses operating under Aware Integrated, Inc. (AII), a nonprofit corporation and parent organization.

“Our overall financial performance was driven by a significant turnaround in the adjusted market value of our investment portfolio at the close of 2019,” said Dr. Craig Samitt, president and CEO of Blue Cross and Blue Shield of Minnesota. “Looking back, I am very pleased with the high levels of performance and accountability we set for ourselves. It was a year marked by the bold steps we took to address the unsustainability of health care costs while simultaneously forging partnerships with key providers. Additionally, 2019 served as a launching point for our new strategic plan, which continues our journey to transform the health care system through reinvention and innovation.”

For the year, AII paid out $12 billion in medical claim payments, which represents approximately 90 cents of every premium dollar going directly to cover members’ health care costs. Additionally, the organization paid more than $66 million in taxes, assessments and surcharges. Year-end total member enrollment remained flat at approximately 2.8 million.

Blue Plus

Blue Plus is a health maintenance organization (HMO) serving the individual market as well as the Prepaid Medical Assistance Program (PMAP), the state Medicaid program, and MinnesotaCare, the health program for low-income families. Blue Plus experienced operating losses of $17.5 million, which includes $6 million in combined losses for PMAP and MinnesotaCare, and a gain of $7 million.

Blue Cross and Blue Shield of Minnesota

The lines of business served by Blue Cross in 2019 include small and large employer plans and a suite of Medicare offerings – Medicare Advantage, Platinum BlueSM (Medicare Cost); and MedicareBlueSM Rx (Medicare Part D). Collectively, Blue Cross reported an overall operating loss of $93.5 million.

The performance of Medicare, including Medicare Advantage, Cost, Medicare Supplement and Part D was positive with operating income of $19.4 million. Blue Cross Medicare plans were awarded an overall Star Rating of 4.5-Stars out of five Stars from the Centers for Medicare and Medicaid Services (CMS). This 2020 Star Rating was awarded to the Platinum Blue Cost plan, the SecureBlue Minnesota Senior Health Options plan and the MedicareBlue Rx Part D plan.

2019 Accomplishments and Milestones

As part of its mission to inspire change, transform care and improve health, the organization also celebrated additional accomplishments, including:

  • Blue Cross announced plans to offer insulin coverage to thousands of members with a $0 copay at the point-of-sale (pharmacy counter). As of January 1, 2020, Blue Cross included several insulin options as a covered benefit with no member cost-sharing in plans where Blue Cross sets the health plan benefits and manages the financial risk.
  • Blue Plus expanded Individual and Family plan availability to all 87 Minnesota counties during the open enrollment period, marking the first time since 2016 that every county had a “Blue” option.
  • Blue Cross and Blue Shield of Minnesota and North Memorial Health joined forces to transform healthcare in Minnesota through a joint venture agreement that made both organizations shared owners of North Memorial Health clinics.
  • Blue Cross implemented innovative value-based care contracts with providers, including a five-year agreement with Minnesota Oncology that will change the way cancer care is paid for and managed in order to deliver optimal health outcomes at lower costs.
  • The organization contributed more than $15.5 million to community initiatives through investments from the Center for Prevention, grants from the Blue Cross and Blue Shield of Minnesota Foundation and the associate community giving campaign.
  • Company associates volunteered more than 17,500 paid time-off hours across a variety of community service initiatives and diverted 361 tons of waste from landfills by reducing material waste in office buildings by 15 percent and increasing recycling by 13 percent.
  • Forbes Magazine named Blue Cross one of America’s Best Employers for 2019 its first-ever ranking of America’s best employers by state.

The 2019 Report to the Community can be found at bluecrossmn.com/socialimpact.

AII serves as the holding company for all affiliates and subsidiaries, including the following regulated businesses associated with Blue Cross:

Aware Asset Management — a federally registered investment adviser with over $2.3 billion in assets under management as of December 31st, 2019 servicing the unique cash and risk management needs of the insurance industry through fixed income management and its Exchange Traded Fund, the Aware Ultra-Short Duration Enhanced Income ETF (NYSE: AWTM).

Blue Cross and Blue Shield of Minnesota — A nonprofit health services company and independent licensee of the Blue Cross and Blue Shield Association.

Blue Plus — A nonprofit HMO and independent licensee of the Blue Cross and Blue Shield Association that offers health plans and contracted provider networks throughout Minnesota to individuals and local, state and national groups.

MII Life Insurance, Inc., d/b/a FurtherSM (formerly SelectAccount®) — A third-party administrator of medical spending accounts included in consumer-directed health plans throughout the country.

Blue Cross provides all information, reports and audited details as required by the State of Minnesota for both commercial and public program products. Detailed financial statements for the organization’s regulated businesses are filed with the Minnesota Department of Commerce.

About Blue Cross and Blue Shield of Minnesota

For more than 90 years, Blue Cross and Blue Shield of Minnesota (bluecrossmn.com) has supported the health, wellbeing and peace of mind of our members by striving to ensure equitable access to high quality care at an affordable price. We are on a mission to inspire change, transform care and improve health for the people and communities we serve by reinventing both ourselves and the broader system. Our more than 2.5 million members can be found in every Minnesota county, all 50 states and on four continents. As a proud nonprofit organization, we believe working to advance wellness for all Minnesotans is the greatest investment we can make. Our goal is nothing less than for everyone to be able to achieve their full health potential, regardless of race or other socially defined circumstances. Blue Cross and Blue Shield of Minnesota is an independent licensee of the Blue Cross and Blue Shield Association, which serves more than 107 million members across the U.S.

Blue Cross offers PPO, HMO-POS, and Cost plans with a Medicare contract, and an HMO-SNP plan with a Medicare contract and contract with the Minnesota Medical Assistance program. Enrollment in these Blue Cross plans depends on contract renewal.

Medicare evaluates plans based on a 5-star rating system. Star Ratings are calculated each year and may change from one year to the next.