2024 Annual Report: A Message from Our Chief Financial Officer
Paul Mozak
| 2 min read
Paul Mozak is executive vice president and chief fin...
As a non-profit mutual insurer, Blue Cross Blue Shield of Michigan has been working diligently to maintain the affordability of health insurance for its members and group customers. While facing significant economic headwinds, the company has reported a loss of $1.02 billion on enterprise revenue of $40.6 billion for 2024. These losses were partly offset by strong performance from the nonprofit company’s investment portfolio.
The rising cost of health care services and prescription drugs has been a significant challenge for BCBSM, with the company experiencing a $3 billion increase in year-over-year claims costs. This increase was driven by higher utilization of inpatient acute care, outpatient surgery, emergency room visits, and specialty drugs. The company's pharmacy claims costs alone increased by $900 million, with $544 million attributed to specialty drugs. Despite these changes, BCBSM remains the largest health insurer in Michigan, covering over 5.1 million members.
Even with the mounting pressures Blue Cross is facing, we maintained a strong credit rating. Blue Cross received an A (Excellent) Negative rating, while AF Group maintained an A (Excellent) Stable rating from AM Best, a nationally recognized ratings agency. AM Best’s “negative” outlook for BCBSM, which is a decline from our previous rating of A (Excellent) Stable, can be attributed to current year results as well as financial challenges we expect to face in 2025, and the challenges facing the industry as a whole. The rating is a reassurance to our members and customers, who value a company that demonstrates financial strength and a continuing commitment to meet their needs.
In 2024, we continued to support the state’s health care ecosystem as Blue Cross and our subsidiaries paid an average of $100 million per day to support care and benefits for insured members, and we remained dedicated to the health of all Michiganders with cumulative payments to the Michigan Health Endowment Fund at $1.01 billion as of April 2025. The Michigan Health Endowment Fund backs programs that protect the state’s most vulnerable residents.
In the face of these challenges, we have a commitment to our customers and members to provide affordable and accessible health insurance. We will continue to advocate for collaboration across the health care ecosystem so we’re able to work together with our partners to identify solutions to maintain healthcare affordability. We owe it to you to work together to solve problems that are driving your health insurance premiums higher.
Paul Mozak is executive vice president and chief financial officer at Blue Cross Blue Shield of Michigan.
