Arkansas Blue Cross & Blue Shield Reports $226M Loss for 2024

Arkansas Blue Cross & Blue Shield's office in Little Rock (Steve Lewis)

Arkansas Blue Cross & Blue Shield, citing a rise in health care costs, reported a loss of $226.2 million for 2024, compared with net income of $13.2 million in 2023. 

The nonprofit health insurer, which sits at the top of Arkansas Business’ most recent list of the state’s largest private companies, issued a news release Wednesday attributing the loss to a rising number of medical services for its members and higher costs for outpatient surgery and hospital services. In addition, ABCBS has seen an increase in “high-dollar” claims and prescription drug costs for weight-loss medications, cancer drugs and other specialty medicines, the news release said. 

ABCBS of Little Rock reported a fourth-quarter loss of $129.3 million, marking its third straight quarterly loss. 

ABCBS reported total revenue of $2.907 billion for the year, down from $3.142 billion from 2023. The company (officially USAble Mutual) reported the numbers in a filing to the Arkansas Insurance Department. 

“The company continues to review and adjust its strategy to meet market demands and adapt to the changing healthcare environment,” ABCBS said in the news release. “It has already taken the necessary steps to reconcile finances and its commitment to members in 2025 remains as strong as ever.” 

In January, ABCBS sent layoff notices to 75 workers. ABCBS is also the topic of talks about a possible business combination with Cambia Health Solutions of Portland, Oregon. 

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 spokeswoman for ABCBS told Arkansas Business in January 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’ layoffs in January were “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,” the spokeswoman said. 

Other health insurance companies also struggled financially in 2024. 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.

Still, ABCBS said it upholds its positive rating with credit rating agency A.M. Best, which specializes in the insurance industry. A.M. “Best affirmed the week of February 24, 2025, with knowledge of the current financial filing, that the Arkansas Blue Cross rating remains an ‘A’ with a stable outlook,” the news release said.