Net Earnings Drop For Blues
Blue Cross Blue Shield of Michigan has announced a drop of $127 million in consolidated net earnings for 2006.
Consolidated net earnings fell to $210 million in 2006, down from $337 million in 2005. That covers revenue from the nonprofit’s health insurance business, investment portfolio and for-profit and nonprofit subsidiaries, including the health maintenance organization Blue Care Network.
Consolidated investment earnings of $265 million combined with total net income of $34.4 million at two for-profit subsidiaries to offset losses of $127 million in Medicare Supplemental and individual insurance for those under age 65, the company reported in a press release. Net income was $33.3 million for Accident Fund Insurance Co. of America and $1 million for DenteMax, two for-profit subsidiaries.
The underwriting margin was at one-tenth of 1 percent, which President and CEO Daniel Loepp stated is appropriate for the nonprofit health coverage provider.
Total revenue in 2006 was $16.3 billion and the company paid out $14.6 billion in claims. Medicare Advantage and Medicare Part D prescription products created $575 million in new revenue.
Blue Cross Blue Shield provides or administers health care benefits to 4.8 million members and is the largest coverage provider in