Nation's Blues plans boost bottom lines, reserves

The nation's Blue Cross and Blue Shield plans continued to boost their bottom lines in 2005, although at a slower pace than prior years. According to the national Blue Cross and Blue Shield Association, total net income for its 38 independent member plans, including not-for-profits and for-profits, rose 15% to $8.5 billion last year. That follows a 21% earnings increase in 2004 (to $7.4 billion), a 53% increase in 2003 (to $6.1 billion), and a 43% increase in 2002 (to $4 billion). All told, Blues plans' combined earnings have climbed 204% since 2001. The number of plans varies somewhat year-to-year, usually because one Blues plan consolidates with another. Overall net profit margin expanded to 3.3% in 2005, up from 3.1% in 2004, while administrative costs declined to 10.2% of revenue, from 10.3%. The plans' combined revenue was up 9% to $259.7 billion. At year-end, the 38 plans held $60 billion in combined capital reserves, up 17% from $51.1 million in 2004. Total enrollment climbed 2% to 94.4 million members, the highest level in 25 years. -- by Laura B. Benko