The Post-Standard
Excellus reports $106 million profit for 2012
By: James T. Mulder
Syracuse, N.Y. -- Excellus BlueCross BlueShield made a $106 million profit in 2012 and paid its former chief executive officer David Klein $3.8 million, the health insurer reported today.
The profit was less than half the $223 million it made in 2011.
Excellus paid Christopher Booth, its new CEO, $1.6 million. Sixty-eight Excellus employees earned more than $200,000.
The financial results and compensation information is contained in an annual report Excellus submits to the state.The Rochester-based company generated $6 billion in revenue last year.
Excellus increased members' health insurance premiums last year by an average of 8.32 percent.
Because Excellus is a nonprofit organization, it has to put profits into reserves -- a rainy day fund to cover higher than expected claims or lower than anticipated revenues. At the end of 2012 it had reserves of $1.28 billion. That's more than 1 1/2 times greater than the minimum amount -- $749 million -- required by the state.
Excellus spokeswoman Elizabeth Martin said the company's level of reserves is below what the BlueCross BlueShield Association considers “well capitalized” for a health plan its size.
The insurer said membership increased by about 15,000 members to 1.85 million members.
The health plan's spending for medical benefits increased $410 million or 8.4 percent in 2012, while administrative expenses and operating income declined $116.7 million or 14.7 percent. Excellus said it spends 88 cents of every premium dollar on medical benefits.
Excellus said its board of directors uses an independent process to set executive pay. The directors rely on consultants, market-based compensation information and performance reviews.
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