Blue Cross Blue Shield of Michigan has cut 220 jobs, and eliminated 400 unfilled positions, as part of the insurance giant's ongoing effort to cut costs.
The company's plans insure more than 4.5 million people in the state. The company lost $1.7 billion last year. It attributes those losses to rising medical and pharmacy costs and surging health care use by patients.
Earlier this year, 500 non-union employees accepted a voluntary buyout, but Blue Cross said it wasn't enough to reach its financial goal.
"Our administrative costs comprise nine cents of every premium dollar, and in this time when we are taking double-digit premium increases to our customers, we owe it to them to look inward and take steps to manage our own costs," the company said in a statement.
"As a nonprofit mutual health insurer, we must manage our finances responsibly, with the interests of our customers and members front-and-center. We owe it to our customers and members to be responsible stewards of their money by looking inward and taking steps to lower our own costs and maintain the quality services they expect," the statement said.
The company increased the price of some of its plans last year by more than 11%.
Bret Jackson heads the Economic Alliance for Michigan, a coalition of businesses and labor organizations focused on solutions to the rising cost of health care benefits. "Working families and their employers in Michigan are making tough choices due to unaffordable healthcare costs," Jackson said in an email to Michigan Public. "I feel bad for the workers at BCBSM who will be losing their jobs, but I admire the willingness of BCBSM leadership to look introspectively at their role in the healthcare cost equation.
"I wish more parts of the healthcare system would take a serious look at how to make healthcare more affordable for their patients. Every sector of the healthcare system need to hold themselves accountable," Jackson said.
