Financial Summary

Blue Shield of California reported a net income of $67 million in 2016, down from $115 million in 2015. Of the company's 2016 revenue from premiums, 85.7 percent was spent on medical expenses.

In 2016, the company contributed $34 million to Blue Shield of California Foundation and has given more than $450 million since 2002.

Our 2% Pledge: Five years ago, Blue Shield became the first health plan in the nation to voluntarily limit net income to two percent of revenue. Any year in which Blue Shield earns more than two percent, the company will return the difference to its customers and the community, with approval by the board of directors. Since 2011, the company has returned more than $596 million to customers and the community. Blue Shield’s profit margin was below two percent in each year since 2013 and, as a result, we did not return any funds as part of our pledge commitment.

Find information about Blue Shield’s 2016 executive compensation


Blue Shield of California Consolidated Financials*

Membership in thousands ($ in millions) 2016 2015 2014 2013
Ending membership 3,926 4,080 3,481 2,944
Premiums, net & other revenue & other income $17,663 $14,836 $13,349 $10,824
Less: medical expenses 15,085 12,369 10,948 9,194
Gross Profit
Medical expenses as a percent of premiums
$2,578
85.7%
$2,467
83.4%
$2,401
82%**
$1,630
84.9%
Marketing and selling 631 595 570 543
ACA taxes, premium taxes and other fees 451 417 357 62
General and administrative 1,398 1,341 1,191 974
Total administrative expenses $2,480 $2,353 $2,118 $1,579
Pre-tax operating income $98 $114 $283 $51
Investment income 104 229 271 198
Income before taxes $202 $343 $544 $249
Income taxes 135 228 392*** 78
Net Income
Profit margin (net income as a % of premiums, net)
$67
0.4%
$115
0.8%
$162
1.2%
$171
1.6%
2% Pledge amount**** $0 $0 $0 $0
Foundation contribution (millions) $34 $35 $35 $35

*Additional details on Blue Shield’s financial performance can be found on the California Department of Managed Health Care website by searching for “California Physicians’ Service.

**2014 medical expenses as a percent of premiums reflects the impact of Affordable Care Act (ACA) taxes on premiums; we estimate this to account for a reduction of 2 percentage points from that reported above.

***Increase in 2014 income tax expense reflects improved operational performance, the non-deductibility of a new ACA tax and a protested assessment from the California Franchise Tax Board.

​****In years when our profit margin is less than 2% we do not return any funds as part of our 2% Pledge commitment.