Blue Cross Blue Shield insurance companies have finally emerged as significant players in the Medicare Advantage market after years of struggling to make their mark. But financial pressures could drive them to depart the sector as quickly as they arrived.
Rising medical expenses, unfavorable changes to federal policies and declining federal reimbursement dogged the Medicare Advantage industry in 2024, leading companies such as CVS Health’s Aetna and Humana to cut back where they sold policies. In some areas, Blue Cross plans were the only option left for consumers.
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In this anticompetitive market, Blue Cross licensees such as Elevance Health, Blue Cross Blue Shield of Michigan and Excellus Health shined. Cigna also gained members. This month, the company intends to close its $3.3 billion Medicare Advantage sale to Health Care Service Corp., which manages Blue Cross plans in Illinois, Montana, New Mexico, Oklahoma and Texas.
“In a high-cost environment, you would think you would not want to be growing severely over what the market is growing,” said Ryan Langston, director and senior analyst of healthcare research at investment bank TD Securities.