Business

Blue Cross profits, executive pay up in 2013

Posted February 28

— 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.

89 Comments

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  • Deb1003 Mar 3, 12:08 p.m.

    BCBS is a NOT-FOR-PROFIT company, not a non-profit company. This fact has been stated many times in the comment section, but apparently nobody reads them before they comment. It might be beneficial for some to know the difference.

  • sixnitepkg Mar 3, 8:21 a.m.

    " a 60 percent jump (in NET income) from the previous year".

    does anybody wonder exactly what is causing increased health care costs? THERE is your answer! Insurance co. profits, drug co. profits, malpractice insurance rates and malpractice insurer profits, and NOTHING ELSE! - the ONLY way to cut the national cost of healthcare is to eliminate disgusting profit margins and obscene executive pay!

  • jamieamandanc Feb 28, 7:31 p.m.

    Wow. Must be nice. How is it that BCBS NC is the only option for state employees? They must be paying a HUGE amount of that profit to their lobbyist. For an organization that always goes with low bid and requires three, how is it we only have one option for health insurance. The state has over 680,000 employees. What company wouldn't be aggressive on price point to gain a piece of that pie? Can the oh so praised Pat McCrory answer that one? And why did his administration get a raise when he came in to office, yet nothing in the budget for lesser stateworkers? Let's have an option and save taxpayers money. Everyone standup and ask your governor to allow 680,000 workers an option. After all, it's your money too. Competition in pricing, historically, always lowers price.

  • Earth Brooks Feb 28, 7:10 p.m.

    "For those who somehow think the ACA was a compromise - NO Republicans, House or Senate, voted for this bill. I don't know why anyone would say otherwise. There were some Republican votes in committee, but they were before some additional things were added on - the final bill received no Republican votes."

    ACA was a compromise. If there really was no negotiation with the republicans, and no say at all from the republicans, do you think the democrats would have went with single payer? Republicans may not have voted for ACA but their fingerprints are all over it. They didn't want single payer, they wanted to keep insurance companies like BCBS in the business and they were successful. Now profits are up, executive pay is up, and they're still complaining.

  • walkindogs Feb 28, 7:02 p.m.

    Disguting.....enough said!

  • Wake1 Feb 28, 6:59 p.m.

    They can do whatever they want & pay themselves as much as they want & there is NOTHING you can do about it!!! So quit complaining!

  • dwr1964 Feb 28, 6:31 p.m.

    Obama's plan is working like a well oiled machine.

  • Wise Man Says Feb 28, 6:28 p.m.

    Of course there profits are up. ObamaCare mandated they create extended coverage and expensive health care plans. More coverage for you that you can't use, more costly for you and more profitable for them.

  • scubagirl2 Feb 28, 6:06 p.m.

    Totally shocking.... This is news? The news would be when they revoke their NON profit status... View More

    — Posted by Just Once

    agreed, if they can have millions in PROFIT AND pay their execs more than 1 million there is NOT ONE THING NON-PROFIT ABOUT THAT!

  • borealbob1952 Feb 28, 6:02 p.m.

    NON-PROFIT-- somebody needs to define this to BC/BS. Executive salaries at the expense of NC citizens working 3 jobs to make ends meet. Nice- real Nice.

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