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Blue Cross Blue Shield of Massachusetts Files 2007 Financial Results

CONTACT: Chris Murphy
(617) 246-4851
Christopher.Murphy@bcbsma.com

BCBSMA ends 2007 with 0.8% operating margin

February 29, 2008 — Blue Cross and Blue Shield of Massachusetts, Inc. (BCBSMA) and Blue Cross and Blue Shield of Massachusetts HMO Blue, Inc. (BCBSMA HMO Blue) today reported a combined calendar year, statutory, after-federal-income-tax net income of $208.7 million for 2007, which included $155.8 million in investment income. During 2007, BCBSMA and BCBSMA HMO Blue earned combined premiums of $6.7 billion and incurred $6.0 billion in health care claims. BCBSMA and BCBSMA HMO Blue earned $53.4 million in operating income. In 2007, the average premium increase for BCBSMA and BCBSMA HMO Blue commercial members, after benefit changes, was 7.5 percent.

For 2006, BCBSMA and BCBSMA HMO Blue reported a combined calendar year, statutory, after-federal-income-tax net income of $227.5 million, which included $107.7 million in investment income and a $51.2 million federal income tax adjustment. During 2006, BCBSMA and BCBSMA HMO Blue earned combined premiums of $6.3 billion and incurred $5.6 billion in health care claims. BCBSMA and BCBSMA HMO Blue posted a $71.1 million operating income for the reporting period.

"BCBSMA and BCBSMA HMO Blue continued to experience positive financial results and membership growth in 2007," said Allen Maltz, BCBSMA Chief Financial Officer. "In 2008, we will continue our efforts to reform the health care reimbursement system, enhance the quality of care our members receive and maintain the affordability of our products."

BCBSMA and BCBSMA HMO Blue reported a combined statutory operating income of $14.4 million and investment income of $59.5 million in the fourth quarter of 2007. The combined after-federal-income-tax net income was $89.2 million for the reporting period.

For the quarter ended December 31, 2006, BCBSMA and BCBSMA HMO Blue reported a combined statutory operating income of $4.4 million, and $25.6 million in investment income. The combined 2006 fourth quarter after-federal-income-tax net income was $31.4 million.

In 2007, BCBSMA reported a calendar year, statutory, after-federal-income-tax net income of $145.6 million that included $79.5 million in operating income and $66.6 million in investment income. For the fourth quarter of 2007, BCBSMA reported a statutory, after-federal-income-tax, net income of $54.0 million. BCBSMA earned premiums of $574.7 million and incurred $491.4 million in health care claims for the fourth quarter of 2007. BCBSMA earned $12.8 million in operating income and $25.8 million in investment income for the reporting period.

In 2006, BCBSMA reported a calendar year, statutory, after-federal-income-tax net income of $157.3 million that included $50.3 million in investment income and a $51.2 million federal income tax adjustment. For the fourth quarter of 2006, BCBSMA reported a statutory, after-federal-income-tax net income of $27.6 million. BCBSMA earned premiums of $538.5 million and incurred $454.5 million in health care claims in the fourth quarter of 2006. BCBSMA earned $14.3 million in operating income and $11.8 million in investment income for the reporting period.

In 2007, BCBSMA HMO Blue reported a calendar year, statutory net income of $63.1 million, which included $89.2 million in investment income and a $26.1 million operating loss. For the fourth quarter, BCBSMA HMO Blue reported a statutory net income of $35.3 million. BCBSMA HMO Blue earned premiums of $1.1 billion and incurred $1 billion in health care claims for the fourth quarter of 2007. BCBSMA HMO Blue earned $1.6 million in operating income and $33.7 million in investment income for the reporting period.

In 2006, BCBSMA HMO Blue reported a calendar year, statutory, net income of $70.3 million, which included $57.4 million in investment income. For the fourth quarter of 2006, BCBSMA HMO Blue reported a statutory net income of $3.9 million. BCBSMA HMO Blue earned premiums of $1.1 billion and incurred $981.5 million in health care claims for the fourth quarter of 2006. BCBSMA HMO Blue posted a $9.9 million operating loss and $13.8 million in investment income for the reporting period.

In 2007, combined enrollment for BCBSMA and BCBSMA HMO Blue increased by 53,000 members to more than 3 million.

 

Blue Cross Blue Shield of Massachusetts ( http://www.bluecrossma.com ) was founded more than 70 years ago by a group of community-minded business leaders. Today, headquartered in Boston, BCBSMA provides coverage to more than 3 million members, 2.5 million in Massachusetts. BCBSMA believes in rewarding doctors and hospitals for delivering safe and effective care, and in empowering patients to take more responsibility, become educated health care consumers and become stronger partners with their doctors. Blue Cross Blue Shield of Massachusetts is an independent licensee of the Blue Cross Blue Shield Association.

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