The loss from selling health insurance on the public exchange market wasn’t anywhere near as big as that of much bigger commercial payers, but Blue Cross and Blue Shield of North Carolina still lost money on Obamacare in 2016.

But what’s significant to the healthcare insurance market is that Blue Cross of North Carolina significantly narrowed its public exchange financial loss relative to other carriers. And Blue Cross of North Carolina reduced how much money it lost on the health exchange in a year when the carrier paid a huge fine in the wake of big technology problems that caused major headaches for its Obamacare customers.

In 2016 North Carolina Blue Cross reported a loss of $38 million from its public exchange business, compared to a loss of $282 million in 2015 and about $118 million in 2014, the insurer says.

Overall revenue for Blue Cross of North Carolina declined 4.9% to $7.8 billion in 2016 from $8.2 billion in 2015. The total number plan members also declined year over year to 3.74 million from 3.89 million. In 2016 Blue Cross had about 250,982 health exchange customers.

Blue Cross of North Carolina says plan members with coverage acquired under the Affordable Care Act, or Obamacare, are more expensive to insure—but the plan didn’t provide details on how much more expensive.


“ACA customers continued to be high users of medical care across the board in inpatient, outpatient, professional services and pharmacy, and this population’s use of orthopedics procedures and specialty drugs was significantly higher than other members,” says Blue Cross of North Carolina. “The average ACA customer had twice the emergency room costs than the average customer under age 65 in 2016.”

The $38 million Blue Cross of North Carolina lost on the exchange market is small relative to other bigger commercial healthcare payers. For example, UnitedHealth Group lost more than $4 billion last year and Humana lost more than $200 million and is terminating all of its exchange business for 2017.

Blue Cross of North Carolina reduced its loss by insuring fewer ACA customers, raising rates 24% for ACA policies and better managing expenses, the plan says.  “While we saw fewer losses with ACA plans, these customers continued to need expensive medical services,” says Blue Cross of North Carolina chief financial officer Mitch Perry. “Gains in other lines of business offset these losses but it is still uncertain how changes in Washington will affect our customers in 2018.”

In 2016 Blue Cross also paid a big fine for web-based customer service problems tied to installation of new information management technology.


In September The North Carolina Department of Insurance levied a fine of $3.6 million against the state’s biggest health insurer for web and information technology snafus that resulted in a myriad of consumer problems during the annual enrollment season in January 2016. The glitches generated more than 3,000 complaints that Blue Cross of North Carolina continued to work to resolve through the summer.

The fine stemmed from problems consumers experienced with incorrect billings and crediting of premium payments, policy cancellation notices, difficulty in obtaining premium refunds and with receiving timely notices of policy renewals with explanations of coverage changes.