Blue Cross/Blue Shield of Michigan hasn't yet posted their 2024 financial report on their web site, but the media is reporting that BC/BS of Michigan lost more than $ 1.7 billion in their health insurance core business. This does not auger well for the hospitals and health care providers who are increasing prices in billings submitted to Blue Cross. As Herbert Stein once said: “If something cannot go on forever, it will stop.”
Back in January, we asked if BC/BS of Michigan is going bust. It will be interesting to look at their 2024 financials to determine just how severe their predicament is and what the likely prognosis is. This is what we know so far:
Blue Cross Blue Shield of Michigan posts 2024 operating loss amid rising medical claims
By Candice Williams - March 3, 2025Blue Cross Blue Shield of Michigan reported Monday an operating loss of $1.7 billion in 2024, as the insurer paid $3 billion more for medical and pharmacy claims costs for members than in the previous year. The company saw a loss of $1.02 billion on enterprise revenue of $40.6 billion for the year.
"In 2024 Blue Cross, Blue Shield of Michigan continues to experience tremendous cost pressures due to significantly higher medical utilization with an expensive health care system, along with skyrocketing prescription drug costs," Paul Mozak, executive vice president and chief financial officer for Blue Cross Blue Shield of Michigan, said during a call Monday. "Despite these challenges, we remain a trusted provider to our members, customer groups and providers continuing to provide access to high quality health care."
In 2024, Blue Cross and its subsidiaries paid an average of $100 million per day for member care and benefits in Michigan and across the nation. This is $12 million more per day than in 2023. Blue Cross faced a $3 billion increase in medical and pharmacy claims costs compared to 2023, officials said.
Medical claims increased by $2.1 billion due to higher use of inpatient care, surgeries, emergency room visits, medical drugs, behavioral health services and professional services. Pharmacy claims increased by $900 million, including a $544 million rise in specialty drug costs, with $215 million of that due to new uses for autoimmune drugs. GLP-1 drugs, used for diabetes and weight management, contributed $1.1 billion in claims, a 29% increase over 2023.
"Health insurers are facing significant economic headwinds — especially nonprofit carriers like us — that are jeopardizing the affordability of health insurance for employers and families across the country,” Tricia Keith, president and CEO of Blue Cross Blue Shield of Michigan, said in a statement. “In Michigan, Blue Cross is working diligently to manage the dramatically increasing cost and use of health care services. But we can’t do this work alone. Collaborating with partners across the health care ecosystem is essential to identifying solutions to maintain health care affordability for our members and group customers.”
The insurer also reported Monday that Keith, who became CEO in January, is earning a base salary of $1.3 million. Her total compensation for 2025 will be reported in 2026.
Total compensation for Daniel Loepp, who retired as CEO at the end of 2024, was $13.9 million, a decrease of $1.85 million compared to 2023, when his compensation was $15.7 million. Loepp's base salary for 2024 was $1.84 million, a $72,000 increase from his 2023 base salary. His bonus for the year totaled $10.7 million, a decrease of $1.6 million from his 2023 bonus. Loepp's other compensation totaled $1.3 million, down $335,625 from the previous year.
Blue Cross Blue Shield of Michigan’s nationwide health insurance membership decreased by about 64,000 members in 2024, mostly due to losses in the Medicaid market. Total membership at the end of the year was 5,140,341, down 1.5%. Medicare Advantage membership grew by 28,178 members to 663,272, and ACA Individual Market membership increased by 6,345 to 160,281. Blue Cross Complete of Michigan saw a loss of 41,894 members to 286,468, mainly due to the end of the Public Health Emergency declaration and continued redeterminations.
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