Blue Cross and Blue Shield of Minnesota Releases 2007 Financial Results

EAGAN, Minn., April 17 /PRNewswire/ -- Blue Cross and Blue Shield of
Minnesota (Blue Cross) today released its financial results for 2007. The
company reported an overall net gain of 0.3 percent ($25.1 million) on
full-year revenues of $8.4 billion, with $7.7 billion in medical claims costs.
Investment income offset $104 million in operating losses. Blue Cross remains
financially strong with statutory reserves equal to nearly three months of
claims and operating expenses.
More than 90 cents of every health care dollar collected by Blue Cross in
2007 went to pay for members' health care costs. Administrative expenses --
including taxes, assessments, agent fees, member health-improvement
initiatives and cost containment programs -- accounted for 9.5 cents per
dollar. Additionally, Blue Cross paid a total of $77 million in taxes and
assessments.
"As a nonprofit organization, Blue Cross strives to hold sufficient
financial reserves to assure we honor our promises to provide coverage for our
members, while keeping premiums as affordable as possible," said Michael
Morrow, executive vice president and chief financial officer. "In 2007,
positive returns on our investments in stocks and bonds allowed us to cover
all costs and support continuing investment in better products and services
for our members, such as our expanded suite of Medicare products and the new
Simply Blue program for individual members."
"At the same time, our operating losses reflect the continually rising
costs of medical care. Blue Cross paid out more money for care than we
collected in premiums. For 2008, we have implemented new cost-savings
programs, but have also had to adjust revenues to reflect the rising costs of
care. We're on track to break-even on an operating basis in 2008."
Enrollment gains
Overall plan enrollment increased approximately 186,000 in 2007 to 2.9
million (2,893,229) members. Membership among consumer-directed health plans
saw strong growth, by nearly 28 percent from 2006. Growth was also strong
among the Blue Cross suite of Medicare preferred provider organization (PPO)
plans and Medicare prescription drug plans.
Blue Plus - HMO results
Blue Plus -- the company's health maintenance organization and a
subsidiary of Blue Cross and Blue Shield -- reported a 2007 operating gain of
$7.4 million, which increased its statutory reserves. The administrative cost
ratio for Blue Plus was 7.7 percent. The figure includes agent fees, taxes,
assessments, and $13.2 million in investments in member health and cost
containment measures.
Blue Cross and its family of companies' annual consolidated earnings
statement will be published on http://www.bluecrossmn.com.
Blue Cross and Blue Shield of Minnesota, with headquarters in the St. Paul
suburb of Eagan, was chartered in 1933 as Minnesota's first health plan and
continues to carry out its charter mission today: to promote a wider, more
economical and timely availability of health services for the people of
Minnesota. A not-for-profit, taxable organization, Blue Cross is the largest
health plan based in Minnesota, covering 2.9 million members in Minnesota and
nationally through its health plans or plans administered by its affiliated
companies. Blue Cross and Blue Shield of Minnesota is an independent licensee
of the Blue Cross and Blue Shield Association, headquartered in Chicago. Go to
http://www.bluecrossmn.com to learn more about Blue Cross and Blue Shield of
Minnesota.
SOURCE Blue Cross and Blue Shield of Minnesota

Pam Lux, +1-651-662-3959, or Jim McManus, +1-651-662-2882, both of Blue Cross
and Blue Shield of Minnesota