Our financial health: a reflection of how we’re ensuring yours

For many Tennesseans, managing personal financial wellbeing can be just as challenging as maintaining good health. Just as a responsible family budgets to cover everyday expenses and unexpected costs, we too carefully manage our finances to meet the needs of our members.

Here's how we navigated 2023, a year marked by significant challenges and achievements.

Meeting member needs: a record year for claims

In 2023, everyday essentials got more expensive, and we did everything we could to make sure the cost of your care wasn't on that list.

We paid out claims that covered $17.81 billion in care for our members, a nearly 10% increase from the previous year. This increase is due, in part, to a 3% increase in membership in 2023.

If we break it down, each member's share of the claims cost was about $5,190. This significant expenditure reflects our commitment to ensuring our members receive the care they need.

Operating costs: efficient management

Our operating costs, including local, state and federal taxes, stayed at 12% of revenues, reflecting our dedication to being good stewards of our members' contributions.

Think of our operating costs as a household managing its cost-of-living expenses efficiently, identifying ways to save - perhaps by conserving electricity, negotiating monthly cell phone bills or carpooling to work or school. By keeping those costs stable, we can focus more resources on providing direct benefits to our members.

Contributing to the community

Just as a family pays taxes to support community services like schools and infrastructure, we paid $507 million in taxes to benefit Tennesseans.

From a separate fund, our foundation donated $11.3 millionto support disaster relief, education scholarships, and establishing wellness spaces in rural areas through our BlueCross Healthy Places program. These contributions are part of our commitment to the broader community, reflecting how a family might support local causes and invest in their neighborhood's well-being.

Reserves: your safety net

Just as financial experts advise families to have a cash buffer of 4-6 months to cover unexpected expenses, we too follow a similar principle in our approach to financial stability.

Our required reserves of $2.8 billion, plus an additional $2.0 billion, total $4.8 billion. This is like a family having enough savings to cover about four months of expenses, providing a necessary safety net.

Our prudent financial management ensures that we can continue to support our members, much like a household ensures they have enough savings to weather any storm.

Modest profits: sustaining our mission

In 2023, we earned $509 million in after-tax net income. The majority came from $349 million in investment income, rather than from the premiums our members pay. In total, our net income represents just 2.5% of our gross revenues and breaks down to about $150 per member.

This is akin to a family setting aside a portion of their income to have ready for things like replacing a flat tire, an unexpected home repair or an unplanned pet surgery. Our five-year average net income is around 2%, reflecting our focus on sustainability rather than high profits.

Navigating challenges: the impact of inflation and health care costs

Health care providers requested significant rate increases, and we worked diligently to manage these costs and keep our members' expenses as low as possible.

Our efforts included expanding telehealth services, increasing access to affordable care,and continuously monitoring our networksto balance access and affordability.

Every dollar counts

To truly understand how we allocate your premium dollars, let's break down every single cent:

1 centof every premium dollar goes toward after-tax profit.

Our financial performance in 2023 showcases our dedication to managing our resources wisely, much like a responsible household. Through these efforts, we remain committed to improving health for all those who call Tennessee home.

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