EAGAN, Minn., April 17 /PRNewswire/ -- Blue Cross and Blue Shield of Minnesota (Blue Cross) today released its financial results for 2007. The company reported an overall net gain of 0.3 percent ($25.1 million) on full-year revenues of $8.4 billion, with $7.7 billion in medical claims costs. Investment income offset $104 million in operating losses. Blue Cross remains financially strong with statutory reserves equal to nearly three months of claims and operating expenses.
More than 90 cents of every health care dollar collected by Blue Cross in 2007 went to pay for members' health care costs. Administrative expenses -- including taxes, assessments, agent fees, member health-improvement initiatives and cost containment programs -- accounted for 9.5 cents per dollar. Additionally, Blue Cross paid a total of $77 million in taxes and assessments.
"As a nonprofit organization, Blue Cross strives to hold sufficient financial reserves to assure we honor our promises to provide coverage for our members, while keeping premiums as affordable as possible," said Michael Morrow, executive vice president and chief financial officer. "In 2007, positive returns on our investments in stocks and bonds allowed us to cover all costs and support continuing investment in better products and services for our members, such as our expanded suite of Medicare products and the new Simply Blue program for individual members."
"At the same time, our operating losses reflect the continually rising costs of medical care. Blue Cross paid out more money for care than we collected in premiums. For 2008, we have implemented new cost-savings programs, but have also had to adjust revenues to reflect the rising costs of care. We're on track to break-even on an operating basis in 2008."
Overall plan enrollment increased approximately 186,000 in 2007 to 2.9 million (2,893,229) members. Membership among consumer-directed health plans saw strong growth, by nearly 28 percent from 2006. Growth was also strong among the Blue Cross suite of Medicare preferred provider organization (PPO) plans and Medicare prescription drug plans.
Blue Plus - HMO results
Blue Plus -- the company's health maintenance organization and a subsidiary of Blue Cross and Blue Shield -- reported a 2007 operating gain of $7.4 million, which increased its statutory reserves. The administrative cost ratio for Blue Plus was 7.7 percent. The figure includes agent fees, taxes, assessments, and $13.2 million in investments in member health and cost containment measures.
Blue Cross and its family of companies' annual consolidated earnings statement will be published on http://www.bluecrossmn.com.
Blue Cross and Blue Shield of Minnesota, with headquarters in the St. Paul suburb of Eagan, was chartered in 1933 as Minnesota's first health plan and continues to carry out its charter mission today: to promote a wider, more economical and timely availability of health services for the people of Minnesota. A not-for-profit, taxable organization, Blue Cross is the largest health plan based in Minnesota, covering 2.9 million members in Minnesota and nationally through its health plans or plans administered by its affiliated companies. Blue Cross and Blue Shield of Minnesota is an independent licensee of the Blue Cross and Blue Shield Association, headquartered in Chicago. Go to http://www.bluecrossmn.com to learn more about Blue Cross and Blue Shield of Minnesota.
|SOURCE Blue Cross and Blue Shield of Minnesota|
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