2014 Annual Report to Policyholders and Members

Transcription

1 2014 Annual Report to Policyholders and Members

2 Statement of Licensee Blue Cross and Blue Shield of Kansas is licensed by the Blue Cross Blue Shield Association to offer certain products and services under the Blue Cross and Blue Shield brand names within the company s own geographic service area all Kansas counties except Johnson and Wyandotte. Blue Cross and Blue Shield of Kansas is an independently licensed company governed by its own board of directors and is solely responsible for its own debts and other obligations. Neither the Blue Cross Blue Shield Association nor any other organization using the Blue Cross and/or Blue Shield brand names acts as a guarantor of Blue Cross and Blue Shield of Kansas obligations. The Blue Cross and Blue Shield system of individual Plans is not a single entity but rather an association of independent companies.

3 Steadfastly serving our members through change Change and consistency. Two words with opposite meanings, so not words one would expect to use together to describe a single event or year; yet those are the best words I can use to sum up 2014 for Blue Cross and Blue Shield of Kansas. Through this ongoing period of change in our health care system, much has remained constant throughout our long history as a Kansas insurance company. Reform continues period of change The centerpiece of the Affordable Care Act (ACA) came to fruition Jan. 1, 2014, as consumers who were previously unable to purchase health insurance due to past or current illnesses could buy coverage. In addition, millions of consumers who previously could not afford health insurance for themselves or their families had access to tax credits, while many also received help paying their out-ofpocket costs. Since March 2010, our employees have worked diligently to prepare for Jan. 1, That work continues for the foreseeable future as we comply with additional aspects of the law, modernize our infrastructure, and provide new programs, tools and services for our members. As we anticipated, our business grew in 2014, but not solely because of the ACA. Enrollment in health plans grew to nearly 670,000 people, with twice as many new members in employer-based group plans as in individual plans. This growth allowed us to develop relationships with new members, learning about the health care services they required. Our employees were available to help them navigate the health care system as we opened new lines of communications, and added online tools for self-service options and wellness information.

4 In a new world, our identity remains constant Despite this tremendous period of change, I often remind employees of the deep-rooted consistency in what we do and who we are as a company. Just as we were in 1942, we remain a Kansas-based health insurance company providing local service to our family, friends and neighbors. We develop and sell well-recognized, Blue-branded health plans for businesses and individuals in every county of our 103-county service area. To allow flexibility in benefit design, many 2015 plans were developed under a new subsidiary known as BlueCross BlueShield Kansas Solutions. We offer members a broad choice of health care providers by maintaining the largest network in our service area. For these contracting providers and our members, we pay claims accurately and quickly. Our numbers reached new heights in 2014 as we processed nearly 17.2 million claims surpassing $2.3 billion in payments. As a mutual insurance company, we are accountable to our policyholders to be good stewards of their premium dollars. Our employees are dedicated to keeping our administrative costs as low as possible while our board of directors and leadership team are committed to managing policyholders reserves in a manner that provides long-term security and stability. Even though the costs associated with the ACA we owed $20 million in new taxes for 2014 and the financial commitment to modernize our infrastructure have put pressure on our administrative costs, we still operate our business well within the medical loss guidelines required by law. Our administrative expenses in 2014 accounted for about 11 cents of a premium dollar while 89 cents went to pay those 17.2 million claims. We remain financially strong for our members. Our strong reserves made up the difference between premiums collected and claims paid in 2014, allowing us to absorb a $74 million underwriting loss.

5 We know it is important to engage in the communities in which we live and work. Our employees have a strong tradition of volunteerism and community giving through our United Way, March of Dimes, Project Topeka and Project Salina campaigns. During 2014, the Blue Cross and Blue Shield of Kansas Foundation provided more than $740,000 in funding to 272 separate organizations to support health-related programs and initiatives. After nearly 75 years of serving Kansans, this is what we know about our company: Blue Cross and Blue Shield of Kansas exists to provide peace of mind and access to a better quality of life not only for our members, but for all Kansans. If we do our jobs well if we provide our members clear and reliable information, pay their claims accurately and quickly, and live up to the promises we ve made to them, then our members can focus not on their insurance contracts, but on the health and well-being of themselves and their loved ones. On behalf of all our employees, thank you for choosing Blue Cross and Blue Shield of Kansas as your health insurance partner. We are honored to serve you and your family. Andrew C. Corbin President/CEO Blue Cross and Blue Shield of Kansas

6 Blue Cross and Blue Shield of Kansas, Inc. CONDENSED CONSOLIDATED BALANCE SHEET December 31, 2014 and Assets Cash and Investments $1,394,515,183 $1,422,574,191 Premiums and Other Receivables 93,399,196 77,974,720 Property and Equipment, Net 84,121,182 98,529,200 Investments in Subsidiaries * Other Assets 133,411,979 95,381,245 Total Assets $1,705,447,540 1,694,459,356 Liabilities Claims Incurred and Unpaid $300,154,947 $246,154,139 Premiums Received in Advance 136,706, ,995,613 Accounts Payable and Other Liabilities 293,108, ,602,557 Total Liabilities 729,970, ,752,309 Policyholders Reserves 975,477,181 1,008,707,047 Total Liabilities and Policyholders Reserves $1,705,447,540 $1,694,459,356 As derived from the audited financial statements of Blue Cross and Blue Shield of Kansas, Inc. *Investments in subsidiaries of $60,995,429 and $47,833,792 for 2014 and 2013 respectively, are eliminated for consolidated financial statements.

7 Board of Directors Officers Steve W. Sloan, chairman, Pittsburg President/CEO, Midwest Minerals, Inc. Diane L. Lee, CPA, CSEP, vice chairman, Hutchinson Swindoll, Janzen, Hawk and Loyd, LLC Andrew C. Corbin, Topeka President/CEO, Blue Cross and Blue Shield of Kansas Members James M. Alley, III, D.D.S., Wichita Oral and maxillofacial surgeon Leon J. Boor, Abilene Administrator, Memorial Hospital (retired) Leonard R. Hernandez, Wellington President/CEO, Sumner Regional Medical Center Robin R. LacKamp, Wichita Vice president and director of human resources, American State Bancshares, Inc. Steven D. Marsh, Wichita Steven D. Marsh, CPA, Chartered Edward J. Miller, Iola Apparel manufacturer (retired) Louis E. (Gene) Mosiman, Topeka Vice president emeritus, Washburn University Robert L. Mullen, Manhattan Administrator, Hospital District 1 of Rice County (retired) Gary D. Shorman, Hays President/CEO, Eagle Communications, Inc. Thomas C. Simpson, M.D., Sterling Physician (family practice, retired) Susan M. Smith, Wichita Senior vice president and chief human relations officer, GLMV Architecture, Inc. Cathy Mih Taylor, M.D., Chanute Neosho County Memorial Hospital (physician, OB/GYN) Kenneth W. Winter, Dodge City General manager, Winter Feed Yard (as of Dec. 31, 2014)

8 5-111A 06/15 An independent licensee of the Blue Cross Blue Shield Association.