Blue Cross profits, executive pay up in 2013
Posted February 28, 2014
Chapel Hill, N.C. — Blue Cross Blue Shield of North Carolina on Friday reported $92.6 million in net income in 2013, a 60 percent jump from the previous year.
The state's largest insurer also reported in filings with the Department of Insurance that six executives made $1 million or more in compensation last year, led by President and Chief Executive Brad Wilson at $2.96 million.
“In a challenging year for the health care industry, our company provided value for our customers by investing in technology and bringing new products and services to the market to meet our increasingly diverse customers’ health care needs," Wilson said in a statement. "In addition, our network discounts with doctors and hospitals saved them over $5.7 billion on health care expenses."
Blue Cross' annual revenue rose 10 percent, from $5.8 billion in 2012 to $6.4 billion, and it added about 90,000 customers to its rolls in advance of the Affordable Care Act's requirement that most Americans have health coverage, starting in 2014. It's profit margin rose from 1 percent in 2012 to 1.4 percent.
Customers in group insurance plans saw their premiums go up by an average of 8 to 9 percent, officials said.
The insurer processed 50 million claims last year, paying out about $5 billion. That compares with $4.5 billion on 48.1 million claims in 2012.
Almost 86 cents of every $1 in premiums went to claims last year, with much of the rest going to customer service and technology, officials said. Under the Affordable Care Act, insurance companies must spend at least 80 to 85 percent of their premiums on claims.
Company officials said they spent $65 million on system infrastructure last year, largely to prepare for the full implementation of the health care law.
The company also paid $118.3 million in federal, state and local taxes last year, up from $92.1 million in 2012.
In a separate filing, Blue Cross stated that Wilson earned a $2 million bonus last year on top of his $897,427 salary. His total compensation was up 19 percent over 2012.
Five other company executives also earned more than $1 million in salary and bonus last year:
- Executive Vice President Maureen O'Connor at $1.72 million
- Chief Financial Officer Gerald Petkau at $1.67 million
- Chief Sales and Marketing Officer John Roos at $1.29 million
- Chief Operating Officer Alan Hughes at $1.28 million
- Chief Medical Officer Don Bradley at $1.1 million.
Overall, the compensation for Blue Cross' top 10 executives rose by almost 11 percent last year.