The nation’s Blue Cross and Blue Shield plans have fared worse than publicly traded health insurance companies on the new health insurance exchanges, with many of these plans losing hundreds of millions of dollars last year on individual policies sold under the Affordable Care Act.
A new report from Fitch Ratings, which looked at earnings ofnearly three dozen Blue Cross and Blue Shield companies, showed 23 had a decline in earnings and 16 had a net loss , largely related to losses from policies sold to newly insured Americans who bought subsidized individual policies on public exchanges. There were 23 Blue Cross companies that reported a “collective $1.9 billion decline in earnings” for the first nine months of 2015, and 16 of those companies had net losses.
It’s a significant development because these insurers are raising prices for this year to recover the losses and taking additional steps like slashing broker commissions and narrowing doctor and hospital choices to rebound in 2016.
Blue Cross plans also tend to be the dominant providers of individual policies in their states. In Illinois, for example, the Blue Cross plan owned by Health Care Service Corp. has about 80% of the customers who purchase coverage on the public exchanges.