Financial Summary
Blue Shield of California reported a net income of $413 million in 2018, up from $296 million in 2017. This increase was due primarily to improved operating performance and year-over-year membership growth exceeding 5 percent. Of the company's $20.6 billion in revenue from premiums in 2018, 83.6 percent was spent on medical care – totaling more than $17.2 billion in claims paid to healthcare facilities and providers.
Our 2% Pledge: In 2011, Blue Shield became the first health plan in the nation to voluntarily limit net income to two percent of revenue. For 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 we made the pledge, the company has returned more than $596 million to our customers and the community. Our strong performance in 2018 will enable us to give back another $57 million to the communities we serve.
The company also contributes annually to Blue Shield of California Foundation, whose mission is to build lasting and equitable solutions that make California the healthiest state and end domestic violence. Blue Shield of California contributed $45 million to the foundation in 2018 and has given more than $545 million to the foundation since 2002.
Find information about Blue Shield’s 2018 executive compensation (PDF, 282KB).
Blue Shield of California Consolidated Financials*
| ($ in millions) | 2018 | 2017 | 2016 |
|---|---|---|---|
| Premiums, net & other revenue & other income | $20,632 | $17,684 | $17,598 |
| Less: medical expenses | 17,249 | 15,035 | 15,085 |
| Gross Profit Medical expenses as a percent of premiums |
$3,383 83.6% |
$2,650 85.0% |
$2,513 86.0% |
| Marketing and selling | 723 | 685 | 631 |
| ACA taxes, premium taxes and other fees | 584 | 261 | 451 |
| General and administrative | 1,579 | 1,541 | 1,398 |
| Total administrative expenses | $2,286 | $2,487 | $2,480 |
| Pre-tax operating income | $497 | $163 | $33 |
| Investment income | 119 | 142 | 169 |
| Income before taxes | $616 | $304 | $202 |
| Income taxes | 203 | 8 | 135 |
| Net Income Profit margin (net income as a % of premiums, net) |
$413 2.0% |
$296 1.7% |
$67 0.4% |
| 2% Pledge amount** | $57 | $0 | $0 |
| Foundation contribution (millions) | $45 | $39 | $34 |
*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.
**In years when our profit margin is less than 2% we do not return any funds as part of our 2% Pledge commitment.