Health Care Services Corporation, the parent company for Blue Cross Blue Shield of Texas, did not pay federal taxes in 2018 and netted $4.1 billion, receiving a $1.7 billion tax refund last year, according to financial statements. In 2017, the company had a net income of $1.3 billion, an increase of over 315 percent for this year.
The tax overhaul passed by Congress and increasing profitability of health insurance played a large role in the increase, according to Axios. Profits don’t include fees from self-insured employers pay to HCSC, and the Affordable Care Act Marketplace was a big winner for HCSC. Only 64 percent of healthcare marketplace premiums were spent on medical care, resulting in $2.7 billion in gross profit. ACA plan holders may be in store for rebates due to premiums that were too high. Axios reports that there were certain tax loopholes that benefitted the Blue Cross companies.
HCSC launched a $1.5 billion initiative called Affordability Cures to reduce healthcare costs of health plan holders, teaming up with research institutions around the state to focus on behavioral health, vaccine adherence, and analyzing usage data to improve efficiency. As a part of the initiative, BCBS of Texas will launch a healthy meal delivery service to neighborhoods that lack access to quality food.
The initiative looks to address social determinants of health and learn about how to head off healthcare costs before they become too expensive.