Key Takeaways
- Reducing our costs means changing how work gets done. Blue Cross is investing in technology to improve efficiency, reduce waste and make better use of health care dollars.
- In 2025, we set a goal to reduce administrative costs by $285 million and we exceeded that target by reaching $420 million.
- Despite ongoing financial challenges in the health care system, Blue Cross remains committed to offering competitively priced plans that provide access, security and coverage nationwide.
Your health insurance dollar is used to pay for every part of the system you depend on whenever medical care is needed. Of course, this includes hospital care, doctor care and drugs. But it also includes the cost of operating our health insurance business.
As families become more frustrated with the rising cost of health care, we recognize that solutions must include action from every part of the system. At Blue Cross Blue Shield of Michigan, that means looking inward and taking responsibility for how we operate.
Reducing our administrative costs is a direct way we can steward the health care dollars entrusted to us by members and customers. Making changes and reducing our administrative costs is a big responsibility as we also work across the system to lower rising medical and drug costs.
Holding ourselves accountable while we work for you
Over the past year, Blue Cross closely examined how we operate to identify inefficiencies and opportunities to reduce administrative spending. In 2025, we set a goal to reduce administrative costs by $285 million. We exceeded that target, lowering costs by $420 million. We are also on track toward our longer-term goal of reducing administrative costs by $600 million by 2027.
In 2024, roughly 9 cents of every member’s premium dollar went toward our administrative costs. That part of your health insurance dollar that pays for our operations returns value to you. We negotiate lower prices with hospitals for the care you receive. We reduce drug costs by bringing forward lower cost options and offering programs to help members get the lowest possible price. We also provide 24-hour support to members as well as networks of providers who contract with us to provide quality, affordable care.
These actions and others reflect our commitment to responsible stewardship and ongoing work to provide value to our members for the share of each dollar they invest in us.
Using technology to create efficiencies
Reducing our costs also means changing how work gets done. Blue Cross is investing in technology to improve efficiency, reduce waste and make better use of health care dollars.
We are using advanced data analytics and artificial intelligence to automate routine work, identify billing anomalies and uncover inefficiencies across the organization. These tools help reduce administrative expenses while allowing employees to focus on higher-value work that directly supports members, customers and providers.
We are also using technology to review contracts more efficiently, identify cost-saving opportunities and improve internal processes. These innovations help us operate a big business more effectively while keeping administrative costs in check.
Partnering and innovating for solutions
Affordability requires constant evaluation and adaptation. Blue Cross continues to partner with vendors, providers and other stakeholders to find smarter ways to operate and deliver value. We regularly assess how we do business, where improvements can be made and how we can better respond to the needs of our customers and members.
Despite ongoing financial challenges in the health care system, Blue Cross remains committed to offering competitively priced plans that provide access, security and coverage nationwide. We also continue to be the only insurer offering health plans for individuals in every Michigan county.
Promoting affordability begins with our own costs
Blue Cross has served Michigan for 87 years, and we intend to continue leading with accountability and purpose. Reducing our administrative costs is one of the ways we are helping address affordability today while building a more sustainable future for health care in Michigan.
Learn more about how Blue Cross Blue Shield of Michigan is addressing health care affordability at mibluedaily.com/affordability.
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