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Excellus BCBS posts $108M operating loss in 2025 amid rising health care costs
Excellus BCBS posts $108M operating loss in 2025 amid rising health care costs
Listen to this articleRising health care costs weighed heavily on Excellus BlueCross BlueShield‘s financial performance in 2025, as the insurer reported a 1.4 percent operating loss totaling $108 million.
According to its annual report filed with the New York State Department of Financial Services, Excellus BCBS spent nearly $7 billion on medical and prescription drug claims in 2025, which is a 16 percent increase, or $936 million, over 2024. The jump marks the organization’s largest year-over-year percentage increase in claims costs in nearly two decades.
On average, the health plan paid about $19 million per day in medical and drug benefits last year. Rising spending on prescription medications—particularly GLP-1 drugs and treatments for inflammatory conditions—contributed significantly to the higher costs.
For the third consecutive year, elevated claims payments and changes in federal reimbursement formulas for hospitals serving Medicare patients have strained finances. Much of the $936 million increase in 2025 was driven by higher claims expenses among Medicare Advantage members, the insurer reported. Those higher claims costs have continued into 2026, intensifying financial pressures even as the organization works to improve health outcomes and manage affordability.
Investment gains helped offset operating losses, allowing the insurer to finish 2025 with a 2 percent net margin, or $150 million. Reserves stood at $1.7 billion at year’s end.
The report also shows that 92 cents of every premium dollar goes directly to medical care, including prescription drugs, hospital stays and physician visits. The remaining portion primarily covers taxes and operating expenses such as employee compensation, customer service, claims processing and IT infrastructure.
“The health plan is a well-managed, local company that keeps its margins modest on purpose,” said Board Chair Ty Muse. “This approach helps ensure long-term financial stability and allows the health plan to direct as much of each premium dollar as possible to medical care. That focus reflects the company’s mission to improve access, affordability and the quality of health care for the communities it serves.”
Despite financial headwinds, Excellus BCBS continues to receive national recognition. The insurer was named to the Forbes 2026 list of America’s Best Midsize Employers and ranked No. 1 in customer satisfaction among Medicare Advantage plans in New York by J.D. Power.
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