How the BCBS Association Spends Revenue

The Blue Cross Blue Shield Association (BCBSA) is a tax-exempt, non-profit 501 (c) 4 (a social welfare organization) based in Chicago, Illinois that serves as a national association of 34 independent BCBS companies that provide health insurance to more than 115 million people.

They also own and manage the BCBS trademarks and names in more than 170 countries around the world.  For example, BCBS of Florida, Inc. (DBA Florida Blue), Health Options, Inc. (DBA Florida Blue HMO), Florida Combined Life Insurance Company (DBA Florida Combined Life) are independent licensees of BCBSA. Consequently, revenue comes from the members of BCBSA whose revenue comes from insurance premiums. In other words, part of your BCBS health insurance premiums are paid to BCBSA.

In 2019, BCBSA reported total revenue of $696 million that came from six (6) sources:

• $224 million:  BCBS Federal Employee Program
• $199 million:  Other Services (no detail provided but appears to from members)
• $185 million:  BCBS BlueCard (plan for members to obtain coverage while traveling or living away)
• $ 60 million:  Member Fee Services
• $ 18 million:  BluesNet (telecommunications services)
• $ 10 million:  Investment Income, Gains, etc

In summary, more than 90% of revenue comes from the BCBS Federal Employee Program, other services, and the BCVS BlueCard.

Expenses totaled $642 million (not including $17 million in depreciation) with expenses categorized as follows:

• $245 million (35% of revenue):  Fees for Services (primarily “other” described as “consulting fees”)
• $226 million (32% of revenue):  Compensation
• $ 89 million (13% of revenue):  Office-Related Expenses
• $ 59 million (9% of revenue):  Advertising and Promotion
• $ 14 million (2% of revenue):  Travel and Conferences
• $  9 million (1% of revenue):  Other Expenses (i.e. sponsorships, books, periodicals, etc)

Using the above information, every $100 in revenue was spent as follows:

$100:  Revenue

-$ 35:  Fees for Services

-$ 32:  Compensation

-$ 13:  Office-Related Expenses

-$  9:  Advertising and Promotion

-$  2:  Travel and Conferences

-$  1:  Other Expenses 

-$ 92:  Total Expenses

 $  8:  Revenue Remaining:  To General Fund

As illustrated above, 90% of revenue was spent on outside fees (primarily consultants), compensation for employees, office-related expenses, and advertising and promotion.  $8 out of every $100 was allocated to the general fund which had $161 million at year-end (compared to $96 million at the beginning of the year).

To read the IRS Form 990 (2019), click here.