RALEIGH — North Carolina’s largest health insurer said Wednesday it turned a $185 million profit in 2016 despite its money-losing exposure to the sicker-than-usual customers who bought medical coverage through the federal health care law.
Blue Cross and Blue Shield of North Carolina reported to state regulators that its profit represented 2.4 percent of the $7.8 billion revenue that premiums generated.
The company said it logged a $38 million loss last year on policies issued in line with former President Barack Obama’s health overhaul law, but offset that red ink with gains in other kinds of business. The company’s Affordable Care Act policies lost $123 million in 2014 and $283 million in 2015, Blue Cross Chief Accounting Officer and Treasurer Mitch Perry said during a conference call.
Blue Cross last year had 26 percent fewer ACA customers after increasing premiums by 32 percent in 2016. About 90 percent of ACA customers receive subsidies to help pay premiums.
President Donald Trump has promised to repeal the federal health care law.
Blue Cross is the only insurer selling individual policies on the federally run ACA insurance marketplace in all 100 North Carolina counties. After the 2017 sign-up period that ended in January, the company has nearly 500,000 ACA customers after rivals Aetna and UnitedHealthCare dropped out of the market in North Carolina, Perry said.
Though Blue Cross said ACA customers need more orthopedics procedures, ring up higher pharmacy costs and use emergency rooms twice as much as average, Perry said the company hopes to continue selling the policies. No decision has been made whether to continue with ACA policies in 2018, he said.
“We do feel like we’re getting to know the customers better” and learning to price insurance premiums accordingly, Perry said. “We certainly want to be in the market for our customers, for the state of North Carolina. We’re working hard to figure out how to be in it. But there’s a lot of uncertainty.”
The nonprofit insurer also reported that seven of its top 10 executives were paid more than $1 million each last year, most of that coming in bonuses.
CEO Brad Wilson collected nearly $3.5 million, down 8 percent from the previous year due to a bonus that was nearly $340,000 lower. Wilson announced last month he will step down from company later this year.
The bonuses were granted in the same year North Carolina’s Insurance Department fined Blue Cross $3.6 million for a slew of customer problems including overbilling, incorrect policy cancellation notices and missing policy renewal notices that explained coverage changes.
Blue Cross cited technical glitches as the reason for the problems facing consumers buying individual policies, most of them through the ACA.