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By the numbers: keeping our commitment to affordability

In 2022, we saw another year of high claims costs, with BlueCross paying out $16.51 billion for our members’ health care services. This is down slightly from a record-high year of claims costs in 2021 and demonstrates we must constantly work to keep health care costs in check.

As a local, not-for-profit health insurer, paying those claims is our role. It’s also our responsibility to help manage the ever-rising cost of health care and to be good stewards of your premium dollars.

High-quality care, at a price you can afford

We’ve responded to customers asking us to lower costs in several ways and tackled this complex problem by:

  • Revamping our eight Blue of Tennessee centers, making it more convenient for members to get care from trusted providers and help with their health insurance plan all in one location
  • Expanding access to telehealth and behavioral health through our virtual care services
  • Lowering the cost of drugs through our specialty pharmacy program, which saved $73 million for our employer groups and members in 2022. Through this program we negotiate lower prices for drugs with specialty pharmacies in our network. We still pay the provider for administering the drug and allowing the member to use the same provider.
  • Coordinating care for our members to help them get what they need at the best price. Launching tools like AmplifyHealth for our large employer customers takes this effort a step further, helping members find the lowest-cost options for their health needs.

Another powerful tool that delivers savings is provider networks. In exchange for discounted rates, these networks bring more patients to participating providers — and help insurers make sure providers meet safety and quality standards.

To help keep costs low for all our members and customers, we negotiated new contracts — and in some cases, ended contracts in 2022— with providers who are paid much more than their peers or were requesting significant rate increases.

Your premiums working for you

Alongside these cost-saving initiatives, we remained focused on being good stewards of your premium dollars.

As in 2021, we used 88 cents from every premium dollar to pay for our members’ medical needs.  And we worked hard to operate efficiently to keep costs down for our customers.

Claims for physician services took up a larger share of total medical costs, rising from 27% in 2021 to 30% in 2022.

This was primarily driven by an increase in provider-administered drug costs, which are becoming increasingly expensive. Our specialty pharmacy program is helping to address this issue.

We earned $22 million in after-tax profit during 2022, which represents just 0.1% of our $18.6 billion in revenues. Our profit in 2022 was lower than our long-term average of approximately 2% primarily due to unrealized losses in our investment portfolio.

Being mission-driven means we target lower operating margins than our competitors. With these lower operating margins and intense focus on operating efficiency, we provide greater value to our members and customers in Tennessee.

Supporting our neighbors around the state

We value our role as your local health insurer and prioritize investing in the communities where our members and employees live and work.

BlueCross paid $334 million in taxes last year, which support vital programs and services benefiting Tennesseans.  Additionally, our foundation gave $13.4 million to support communities across Tennessee, focusing on areas such as disaster relief, education scholarships, and the establishment of five BlueCross Healthy Places, particularly in rural communities.

Prepared for the unpredictable

Being a taxpaying not-for-profit allows us to earn lower margins  but also brings a responsibility to maintain strong reserves — as demonstrated by the challenges many businesses faced during the COVID-19 pandemic.

We’re required to hold $2.6 billion in reserves, and we hold an additional $1.5 billion. Combined, those reserves could cover all member claims for around 113 days in the event of an emergency.

We believe it’s critical to hold those additional reserves — and this is even more important during times of market volatility and economic uncertainty.

Our 2022 financial performance allows us to stay strong for our customers, as demonstrated by our A+ Stable rating from Standard and Poor’s.

We’ll continue to adapt, innovate, and address the evolving needs of our members while striving to be responsible stewards of your premium dollars, and create a healthier future for all Tennesseans.

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