Blue Cross and Blue Shield of Minnesota Reports 2011 Results

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Blue Cross and Blue Shield of Minnesota

Apr 03, 2012, 02:08 ET

EAGAN, Minn., April 3, 2012 /PRNewswire-USNewswire/ -- Blue Cross and Blue Shield of Minnesota and its family of companies (Blue Cross) today announced audited financial results for 2011. The nonprofit health company reported full-year 2011 revenues of $9.3 billion and an operating margin of 1.9%, which resulted in a net operating income of $171.6 million. Overall net income (operating income plus other income, including investment income, less taxes) for the year was $200.1 million. This marks the third consecutive year of positive operating results, following a three-year cycle of operating losses.

Blue Cross paid more than $8.2 billion in medical claims on behalf of its members in 2011, which is equal to 89 cents of every premium dollar going directly to pay for health care expenses. Administrative costs represented 8.4% of premiums. Additionally, Blue Cross paid more than $136 million in taxes, assessments and surcharges. Enrollment remained consistent from the previous year at just under 2.7 million members.

"We are pleased to report our third consecutive year of strong financial results," said Kenneth Burdick, president and CEO of Blue Cross. "This affords us the opportunity to invest in developing innovative products and services that benefit our members and ensures that Blue Cross has appropriate levels of financial reserves for advancing our technology infrastructure."

Over the past five year financial reporting period (2007-2011), Blue Cross has reported an operating income margin of 0.5% of revenue; and a net income margin of 1.4% of revenue.

The audited results for Blue Cross include 2011 results for Blue Plus, the company's health maintenance organization (HMO) and a subsidiary of Blue Cross and Blue Shield of Minnesota. In 2011, Blue Plus paid $953 million in medical claims on $1.1 billion in revenue, resulting in an operating margin of $24.8 million, or 2.3%.

Blue Plus membership is a mix of public health programs and commercial business accounts. The subset of public health programs – Minnesota Senior Health Options (MSHO); MinnesotaCare (MNCare); Prepaid Medical Assistance Program (PMAP) and General Assistance Medical Care (GAMC) – represents 93% of the Blue Plus business. Of that subset, the two largest programs by enrollee population are PMAP and MNCare.

For the five year reporting period of 2007-2011, Blue Plus' average operating margin for all public health programs (MSHO, GAMC, PMAP and MNCare) was a gain of 2.0%.

Blue Cross provides all information, reports and audited details as required by the State for both commercial and public program products. In addition, Blue Cross' financial statements are audited by the State on a tri-annual basis. Detailed financial statements for the organization's regulated businesses are filed with the Minnesota Department of Commerce. A consolidated earnings statement for 2011 results is available at bluecrossmn.com.

"Strong financial health is what allows Blue Cross to live our mission of promoting wider, more economical and timely availability of health services for people throughout Minnesota," said Burdick. "We have been dedicated to this mission for 79 years, and our commitment to make a healthy difference in people's lives is as important today as ever."

Blue Cross invests more than $13 million in the community annually. Examples of organizations and activities supported by the company in 2011 include:

Multiple Prevention Minnesota(SM) initiatives – to tackle heart disease, cancer, tobacco use and all funded with money from Blue Cross' successful lawsuit against tobacco companies. These programs include the do.® campaign to encourage physical activity; the Nice Ride Minnesota bike sharing program in Minneapolis and St. Paul; and the Market Bucks initiative, which makes it easier for Minnesotans who receive food support to buy fruits, vegetables and other healthy items at participating farmers' markets throughout the state.
$2.2 million awarded to organizations in the community from the Blue Cross and Blue Shield of Minnesota Foundation to focus on healthy children, healthy neighborhoods, community support and the Healthy Together immigrant health initiative
More than $800,000 raised by the annual employee Community Giving campaign, with a match from the Blue Cross and Blue Shield of Minnesota Foundation, bringing the total amount raised over the past three years to $4.4 million. Total volunteer hours given by Blue Cross employees for the same time period has now exceeded 55,000.

Blue Cross and Blue Shield of Minnesota, with headquarters in the St. Paul suburb of Eagan, was chartered in 1933 as Minnesota's first health plan and continues to carry out its charter mission today as a health company: to promote a wider, more economical and timely availability of health services for the people of Minnesota. Blue Cross is a not-for-profit, taxable organization. Blue Cross and Blue Shield of Minnesota is an independent licensee of the Blue Cross and Blue Shield Association, headquartered in Chicago. Go to bluecrossmn.com to learn more about Blue Cross and Blue Shield of Minnesota.

SOURCE Blue Cross and Blue Shield of Minnesota