Everyone’s concerned about health care costs. And everyone has an opinion about the causes. Many people think that insurer profits are the problem – but the facts tell a different story.
We’re a not-for-profit company, which means we aren’t owned by shareholders looking for dividends or ever-increasing revenues. Our status allows us to earn smaller margins than our for-profit competitors, but we do still pay taxes. In 2014 we paid more than $463 million in local, state and federal taxes.
As the state’s largest health plan provider, 3.3 million members depend on BlueCross BlueShield of Tennessee for outstanding service and fast, accurate claims payment. While our plans are recognized for providing services that keep members healthy and improve their well-being, BlueCross also excels at efficiency, as these 2014 performance highlights reflect:
- 82.2 million claims paid
- 328,000 claims and $46.3 million paid per day
- $5.7 billion paid to hospitals
- $4.4 billion paid to physicians
- $1.5 billion paid for prescriptions
The medical loss ratio (MLR) provision of the health care reform law mandates that we spend 80 percent to 85 percent or more of premiums on direct medical care, depending on the market segment. In 2014 we spent 86.2 percent of total premiums on care, including physician services, inpatient and outpatient care, prescriptions, and other medical services.
How do our profits compare?
To help put our earnings into perspective, consider the average profit margins of other health care industry sectors, as seen in the chart below.
Our mission is providing peace of mind, and that means remaining financially strong so you can trust we’ll be there when you need us. We strive to be good stewards of your premium dollars – after all, it’s your money. The profits we do earn each year are placed into our reserves, which are important because we don’t have access to capital markets and cannot raise funds on an as-needed basis like public companies.
We believe our financial strength ensures your security.