
After a $100 million loss during the first three quarters of 2024 and layoff notices to 75 workers this month, Arkansas Blue Cross & Blue Shield cut ties to longtime contract lobbyists just before the Arkansas General Assembly started its regular session last week.
The not-for-profit health insurer, ranked among the state’s largest private companies, is also the topic of talk about a possible merger with Cambia Health Solutions of Portland, Oregon.

A source with knowledge of a possible deal told Arkansas Business, on the condition of anonymity, that due diligence is now underway.
Cambia serves more than 2.3 million people through its regional health plans, according to its website.
Max Greenwood, an ABCBS spokeswoman, said in response to emailed questions last week that “talks and collaboration [are] very common these days in the health care space, especially among Blue Cross Blue Shield Plans. We have frequently formed partnerships to bring increased efficiencies, more value and new health care options for our members.”
ABCBS, based in Little Rock, has had past dealings with Cambia.
Since 2021, ABCBS has been working with Cambia, Blue Cross & Blue Shield of North Carolina and BlueCross BlueShield of Tennessee as part of the Echo Innovation Alliance, which was formed to support the development of innovative products and services to improve health.
A spokesperson for Cambia told Arkansas Business via email that “we talk with other Blues all the time about things, but it’s our policy not to comment on rumors.”
Partnership talks aside, ABCBS and other health insurance companies endured a rough 2024.
$100 Million Loss
With 3,375 employees as of April 2024 and its $3.14 billion in 2023 revenue, ABCBS sat at the top of Arkansas Business’ most recent list of the state’s largest private companies.
But revenue in the first three quarters of 2024 was down by almost 7%, and the company (officially USAble Mutual) reported to the Arkansas Insurance Department a net loss of $100.5 million for those nine months.
That compares with net income of $94.7 million for the same period in 2023, although the year finished with net income of just $13.2 million after a fourth-quarter loss of $81.5 million.
Revenue, Net Income
2024* |
2023 |
2022 |
2021 |
2020 |
2019 |
|
Revenue | $2,224,281,219 | $3,142,931,165 | $2,808,647,688 | $2,524,108,463 | $2,423,629,238 | $2,394,999,635 |
Net Income | -$100,500,144 | $13,232,289 | $63,766,315 | $51,963,228 | $105,631,950 | $84,545,585 |
*Through Sept. 30
Net Income by Quarter For Quarter Ending
Quarter Ending |
2024 |
2023 |
March 31 | $32,262,267 | $27,088,791 |
June 30 | -$35,865,549 | $50,400,475 |
Sept. 30 | -$96,896,862 | $17,222,163 |
Dec. 31 | Not available | -$81,479,140 |
(Source: USAble Mutual Insurance Co., which does business as Arkansas Blue Cross & Blue Shield, statement on file with the Arkansas Insurance Department)
Greenwood said in an earlier email to Arkansas Business that it was too early to tell what the financial numbers will look like for the fourth quarter, which ended Dec. 31.
“The reduction in workforce was due to changing conditions in the market and increasing financial pressures primarily due to health care costs jumping to the highest levels in more than a decade,” Greenwood said.
Health Insurance Struggles
Other health insurance companies also showed signs of financial problems last year. Health insurance companies in the United States reported a 14.1% drop in net income in the first half of 2024 compared with the same period in 2023, according to the midyear report by the National Association of Insurance Commissioners.
The decrease in net income can be tied to a 7% increase in hospital and medical expenses.
The industry also reported a 2% increase in administrative costs and a 3% drop in enrollment, according to the report.
ABCBS also has seen “large increases” in the use of all medical services, Greenwood said. Prescription drugs are accounting for a larger portion of overall health care costs, particularly with specialty drugs and weight loss drugs like Ozempic.
“These situations have caused necessary shifts in business strategy across the health care and health care insurance industries,” she said.
Disenrollment
In addition, the insurance company lost tens of thousands of members as result of the state’s disenrollment of more than 400,000 people on Medicaid in 2023.
As part of the Obama-era Medicaid expansion, the state pays private insurers to provide health insurance policies to qualifying Arkansans under the Arkansas Health & Opportunity for Me program, or ARHome. (This program had previously been known as the “private option” and Arkansas Works.)
In January 2023, ABCBS had about 207,000 ARHome members. By December 2024, that number was down to 108,729, Greenwood said.
“We’ve also seen a drastic increase in the claims amounts among our ARHome population,” she said. “Remember, since we were the first company who offered ARHome policies statewide when the program began, our block of members in that program is older and most likely unhealthier than what other carriers may be experiencing.”
ABCBS’ premium revenue fell during the first three quarters of 2024.
It reported $2.2 billion premiums collected net of reinsurance through Sept. 30, a 4.8% drop from the same period in 2023.
The insurance company’s total members also fell from 630,444 on Dec. 31, 2023, to 598,492 on Sept. 30. The biggest drop came from its comprehensive individual plan. In that group, the total members fell nearly 17% to 132,596 members.
ABCBS also laid off 85 employees in January 2024. Those positions have not been refilled, Greenwood said.
No additional layoffs are planned at this time.
“Every executive vice president was asked to make reductions in their areas,” she said.
Lobbyists Moves
Greenwood said the insurance company has made several other budget-tightening moves for 2025. “We’ve reduced our budget by more than 7% including cuts to consulting and outside vendor costs, contract labor, software and equipment and facility costs,” she said.
Lobbyists have been among the cuts.
Canceling contracts with lobbyists “is very common and something most companies assess before each session,” Greenwood said. “Primarily we needed to reduce expenditures due to our financial situation and that was accomplished by cutting the number of firms with which we chose to contract.”
The lobbyist firms it cut include WSG Consulting LLC of Conway, Mullenix & Associates of Little Rock and Stacy Williams of Little Rock.
But ABCBS isn’t without lobbyists. It has hired JCD Consulting and Caldwell Consulting, both of Little Rock and both are considered close to the administration of Gov. Sarah Huckabee Sanders. Chris Caldwell of Caldwell Consulting managed Sanders’ 2022 campaign.
ABCBS also has raised premiums on its small and large groups. The average premium increase for small groups was 10.5% and for large groups was 14%. Greenwood said that most of the increases went into effect on Jan. 1.