Blue Cross Blue Shield of Michigan — one of the companies skewered by HHS Secretary Sebelius in her report on individual health insurance premium increases — announced yesterday a statutory underwriting loss of $257 million in 2009, including a $94 million loss in its individual business serving members under age 65. The reasons for the individual losses were familiar, according to BCBS-MI:
The state’s broken regulatory system will continue to drag down financial performance in the individual market until a fair and balanced system is put in place. The current system allows out-of-state for-profit insurers and nonprofit HMOs to reject unhealthier and costlier-to-insure applicants in the individual insurance market. BCBSM accepts all applicants, regardless of their condition or cost.
Overall, however, BCBS-MI reported statutory net income of $12 million in 2009, largely because of investment gains of $242 million. Essentially, BCBS-MI lost a lot of money on its individual and Medigap lines, posted a profit on its other business lines, and was a big winner in its investment portfolio — up 14% — because of rebounding securities markets in 2009.
For additional color on the company’s financial performance, here’s a video of BCBS-MI vice president of finance Paul Mozak on the 2009 results.
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