Blue Cross Blue Shield of Massachusetts (BCBSMA), the state's largest health insurer, ended 2024 with a staggering $400.4 million operating loss – its worst financial performance on record. The nonprofit insurer attributed the shortfall to an unprecedented surge in healthcare spending, marking the most rapid increase in over a decade.
BCBSMA reported a net loss of 2.3% for the year, coupled with a 4.3% operating loss, a sharp contrast to its positive margins in 2023 when it posted a 1.6% net gain and a 0.4% operating margin. The company’s prior largest operating loss, recorded in 2009, stood at $223.6 million – far below 2024's deficit.
The insurer pointed to escalating expenses across nearly all medical service categories, with a particularly steep rise in prescription drug costs. In particular, GLP-1 weight loss medications have been a significant driver of spending, now accounting for 20% of the insurer’s total pharmacy costs – more than $300 million in 2024, double the amount spent in the prior year.
“Costs for medical care and medications for our members have escalated rapidly, and spending is now growing at the fastest rate in more than a decade,” said BCBSMA CFO Ruby Kam in a statement.
The insurer, which serves roughly 3 million members, generated $9.7 billion in revenue in 2024, up from $9.3 billion in 2023. Despite the financial turmoil, BCBSMA’s investment income increased to $176.8 million from $98.8 million the previous year, offering some cushion against the losses.
In response to these mounting financial pressures, BCBSMA executives are implementing various strategies to regain stability. These include adjusting benefit pricing to reflect rising costs, working closely with hospitals to manage price growth, and exploring cost-cutting measures for prescription medications.
The financial strain at BCBSMA mirrors broader challenges within the healthcare system, where hospitals and insurers alike are struggling to manage skyrocketing costs. BCBSMA President and CEO Sarah Iselin previously warned at a Health Policy Commission hearing in November that hospitals across the state are losing money, and health plans are facing similar pressures. She cautioned that tensions between insurers and providers over pricing are likely to intensify in the coming months.
With healthcare costs continuing their upward trajectory, BCBSMA’s historic loss underscores the financial uncertainty facing insurers and the broader medical industry in Massachusetts.
