Michigan Blue Cross: Aid for COVID patients, providers totaled $1.3B in 2020
Strong investment returns helped Blue Cross and Blue Shield of Michigan weather a turbulent 2020 with a $120 million operating margin, less than 1% of the company's $30.1 billion in total revenue, insurance officials said Monday during the company's annual financials briefing.
The state's largest health insurer reaped a positive return of $724 million from its "conservatively invested" portfolio of stocks and bonds, said Paul Mozak, senior vice president of finance and chief risk officer for Blue Cross.
Throughout the pandemic, the company maintained its rating in Best's Rating Report of A with a stable outlook. The complete and audited 2020 financial statement will be released in the company’s annual report in May.
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"Like all businesses, the Blue Cross Blue Shield of Michigan enterprise was confronted with unprecedented volatility and disruption in 2020," Mozak said. "We were able to weather that disruption and uncertainty in part by keeping our health business focused squarely on supporting the needs of our members, our group customers, provider partners and communities."
The Blues provided $1.3 billion in support to its clients and health care providers during the pandemic by paying for COVID testing and treatment, waiving cost-sharing payments for people with COVID-19 and advancing payments to cash-strapped health care providers, officials said.
"We stood behind our members as the COVID-19 pandemic emerged in 2020, proactively deciding to waive member cost sharing for COVID treatment, COVID testing and telemedicine ahead of federal and state mandates," Andrew Hetzel, vice president of corporate communications, said during the Monday phone call.
Because of its positive financial performance, Blue Cross Blue Shield of Michigan will pay $85 million to the Michigan Health Endowment Fund in April to invest in programs protecting Michigan’s most vulnerable residents, the Blues' reported.
Blues' President and CEO Daniel J. Loepp's 2020 compensation totaled $11.5 million, according to Mosak, about $565,000 lower than Loepp's compensation in 2019. The compensation package included a base pay increase of 3%, Loepp's first base pay increase in six years, and a slightly lower bonus than the prior year, the chief risk officer said.
“Since the beginning of the COVID-19 pandemic, the Blue Cross and Blue Care Network has put the health of our members and customers at the forefront — ensuring no-cost services for COVID testing and treatment, providing free telemedicine services for months, and delivering premium refunds,” Loepp said in a statement.
The Blues advanced payments of about $680 million to health systems early in the pandemic to keep revenue flowing as providers closed elective services under a requirement by Gov. Gretchen Whitmer to focus resources on the front lines, the release noted.
The advanced payments included $5 million to physician practices so doctors could invest in telehealth technology. The Blues' investments in telemedicine resulted in more than five million telemedicine visits by Blue Cross Blue Shield and Blue Cross Network members during the pandemic, the company reported.
“We take our role seriously, given how badly needed this revenue is to keep access to care open not just for our members, but for all the people of Michigan," Loepp said. "We applaud the effort and sacrifice of our provider partners in 2020. They saved lives.
"Blue Cross was pleased to play a significant, but behind-the-scenes role, in their heroic response to COVID-19.”