2025 Annual Report: A Message from Our CFO
Paul Mozak
| 3 min read
Paul Mozak is executive vice president and chief fin...
In 2025 Blue Cross Blue Shield of Michigan marked a significant step forward in the company’s ongoing transformation despite continuing cost pressures in the health care delivery system, while still facing significant challenges, including rising medical and prescription drug costs, Blue Cross results improved over the prior year.
Blue Cross posted an operating loss of $246 million on revenue of $43.3 billion. Results improved over 2024 when Blue Cross posted a $1.02 billion operating loss. Blue Cross reported a negative operating margin of -2.3% in 2025 compared with a -4.2% operating loss in 2024.
Results continued to be driven by high medical costs which drove underwriting losses of $975 million which were improved by $734 million from the $1,709 million of losses reported in 2024. Our year-over-year financial performance was helped by a $420 million reduction in administrative expenses, strategic pricing actions, and an investment portfolio that generated a $641 million positive return on a GAAP basis. Additionally, AM Best reaffirmed our A (Excellent) rating, underscoring the strength of our financial foundation and our capacity to meet policyholder obligations.
Our health insurance membership remained stable in this challenging environment. Our total membership held steady at 5,143,961 members, a decline of only 0.1 % from 2024. Blue Cross also experienced growth in key segments including gains of over 25,000 Medicare Advantage members, nearly 18,000 members in ACA individual plans and 7,000 members in Medicaid. Additionally, our small‑group coverage serves over 275,000 members, which leads all insurance carriers in Michigan. These figures reflect the confidence that employers and individuals place in Blue Cross’ ability to provide high‑quality, affordable coverage and access to care.
While we have made measurable gains, the challenge to health care affordability persists. In 2025 we paid $2.6 billion more for medical and pharmacy services than in 2024, driven by higher utilization of complex, high‑cost treatments and a $200 million rise in pharmacy claims. However, targeted initiatives helped keep commercial pharmacy spending relatively flat. In addition, our transformation program – BCBSM Accelerated – continues to streamline processes and achieve administrative savings. Our work with health systems on contracting saw new payment arrangements with eight health systems shift the focus of payment to value‑based payment models and deepen partnerships that improve outcomes while containing costs.
Blue Cross Blue Shield of Michigan continues to support the state’s health care system as Blue Cross and our subsidiaries paid an average of $107 million per day to support care and benefits for insured members, and we remained dedicated to the health of all Michiganders with cumulative payments to the Michigan Health Endowment Fund at $1.11 billion as of April 2026. The Michigan Health Endowment Fund backs programs that protect the state’s most vulnerable residents.
Looking ahead, we’re continuing to implement strategies that deliver results. By expanding our collaborations across the health care ecosystem and pursuing innovative, cost‑effective solutions, we’re protecting our financial health and enhancing value for our members and customers.
Sincerely,
Paul Mozak
Executive Vice President & Chief Financial Officer
Blue Cross Blue Shield of Michigan
Blue Cross Blue Shield of Michigan
