Michigan Blue Cross Blue Shield Reports $265M Net Surplus

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Some more great news for the insurance industry. 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. Daniel Loepp is president and CEO and he 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.

“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.

Oh, Danny Boy, the cash, the cash is calling.

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.

Yes, you read that right. It’s a nonprofit.  They bury their gains in large amounts of salaries and administrative hirings. Remember, this is just one state.  As the insurers rake in the cash, they continued to raise insurance rates.  It never ceases to amaze me.  Or piss me off.

Douglas Farrago MD

Douglas Farrago MD is a full-time practicing family doc in Forest, Va. He started Forest Direct Primary Care where he takes no insurance and bills patients a monthly fee. He is board certified in the specialty of Family Practice. He is the inventor of a product called the Knee Saver which is currently in the Baseball Hall of Fame. The Knee Saver and its knock-offs are worn by many major league baseball catchers. He is also the inventor of the CryoHelmet used by athletes for head injuries as well as migraine sufferers. Dr. Farrago is the author of four books, two of which are the top two most popular DPC books. From 2001 – 2011, Dr. Farrago was the editor and creator of the Placebo Journal which ran for 10 full years. Described as the Mad Magazine for doctors, he and the Placebo Journal were featured in the Washington Post, US News and World Report, the AP, and the NY Times. Dr. Farrago is also the editor of the blog Authentic Medicine which was born out of concern about where the direction of healthcare is heading and the belief that the wrong people are in charge. This blog has been going daily for more than 15 years Article about Dr. Farrago in Doximity Email Dr. Farrago – [email protected] 

  3 comments for “Michigan Blue Cross Blue Shield Reports $265M Net Surplus

  1. esp
    November 16, 2015 at 9:29 pm

    This CEO needs a raise. The guy who runs United Health gets $100 mil annually plus perks. Of course they netted $6.5 bill the first half of this year.

  2. Steve O'
    November 14, 2015 at 9:26 am

    It takes a certain “morality” (look it up, MBA’s) to practice medicine. It’s not a win/win enterprise to value “morality” – it’s a chump’s game. That’s our current take here.

  3. Dr Bonz
    November 14, 2015 at 8:09 am

    Highmark BC in Pennsylvania had enough cash laying around that they purchased a failing hospital system in Pittsburgh for about $528,000,000. Yep. Half a BILLION dollars. (said with pinky to mouth, a la Dr. Evil) about 3 years ago.

    http://www.modernhealthcare.com/article/20130429/NEWS/304299948

    The big question is why does a nonprofit INSURANCE company have that kind of money available? Isn’t that money that should be designated to pay out for medical care for PATIENTS who need it?

    “I’m sorry Mrs. Jones but we are denying payment to the doctor who saved your husband’s life because his coder used the wrong code/submitted his bill on the wrong paper/didn’t wait on the phone on hold the required 45 minutes/wore a blue shirt we didn’t like. But enclosed is a really nice picture of the new yacht our CEO just purchased with his bonus. Isn’t it shiny?”

    The CEO at the time of the buyout in 2013 was Christopher Olivia was paid $6 million in 2011. The new CEO of Allegheny Health Network, John Paul was paid a mere pittance of $1.8 million in total compensation last year.

    Do YOU know of any doctors (you know, those guys that actually do the WORK that brings in every dime of income to these hospitals) that make that kind of salary? Yeah, me neither.

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