Blue Cross Blue Shield reports $265M net surplus and CEO bonus [Detroit Free Press :: ]
(Detroit Free Press (MI) Via Acquire Media NewsEdge) March 03--Blue Cross Blue Shield of Michigan reported a $265-million net surplus last year on $21.3 billion of revenue as the insurer's investment returns compensated for an underwriting loss.
"It is gratifying to see Blue Cross continue to perform strongly -- growing membership, maintaining the financial strength our members rely upon, and maximizing income from investments to take as much pressure as possible off our health insurance members," CEO Dan Loepp said in a statement.
In its annual report released Monday, Blue Cross also reported that Loepp, who arrived in 2005, saw his total yearly compensation jump to $6.6 million from $3.8 million with the payment of a long-term performance bonus.
Loepp got a $1.4 million base salary, a $1.8 million yearly bonus and about $828,000 in other compensation, including personal insurance and a vehicle allowance. He also received a $2.5-million long-term performance bonus that he wasn't yet eligible for in 2012.
Blues officials compared Loepp's long-term performance bonus to that of stock options that corporate CEOs routinely receive.
The insurance company's net surplus was $68 million less than in 2012. It had $417 million in investment income last year that more than made up for a $117-million underwriting loss.
As a nonprofit, the Blues' surplus goes into reserve funds for paying out policyholder claims. The insurer said it spent $18.8 billion on benefit claims last year.
Paul Mozak, vice president of finance, said Blue Cross will now publicly report its yearly performance using generally accepted accounting principles, known as GAAP. Under GAAP, the insurer's previously reported net loss of $2.5 million in 2012 would actually be a $333-million net surplus.
The Blues remained the largest health insurer in the state last year with 4.4 million Michigan policyholders, or 3,283 more than in 2012. That was about 45% of the total Michigan population of 9.9 million.
Contact JC Reindl: 313-222-6631 or firstname.lastname@example.org. Follow him on Twitter @JCReindl.
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