A new report shows that for the first time last year Blue Cross and Blue Shield of Kansas City made more money on the Obamacare exchange than it paid in claims.
The bond ratings agency Standard & Poor’s analyzed Blue Cross plans in 32 parts of the country and found that most are figuring out how to better set premiums to meet the cost of new enrollees as the Affordable Care Act exchanges begin their fourth year.
Blue KC is a prime example. Insurance companies use a “medical loss ratio” to measure how much revenue they get in premiums versus how much they pay in policyholders’ medical costs. Anything above 100 percent means the company is losing money.
Blue KC reduced its medical loss ratio from 109.1 percent in 2014 to 104.7 percent in 2015 to 98.7 percent last year.
The 1.3 percent difference is probably not enough to overcome Blue KC’s administrative costs, but at least creates the possibility of profitability and the trend line is in the insurer’s favor.
Kelly Cannon, a spokesperson for Blue KC, said via email that the current situation in Washington, D.C., is “very fluid and challenging” and the company is still evaluating whether to sell plans on the exchange next year.
Read more: Kansas City Star