...Revenues Grow, Earnings Decline: Fitch Ratings expects the Blue Cross and Blue Shield (BCBS) Companies to report solid increases in enrollment and revenues, but higher general and administrative expenses and markedly lower earnings in 2014. The BCBS Companies' earnings decline contrasts with generally favorable earnings trends produced by publicly traded health insurers. Fitch believes that this comparison in part reflects differences in profit motives between the BCBS Companies and publicly traded Companies, as well as differences in GAAP and statutory accounting practices. Key Challenges: Key challenges facing the BCBS Companies include responding to the potentially adverse effects of the pending U.S. Supreme Court decision regarding consumer subsidies for insurance purchased on the federal government's health insurance exchange; funding pension plan obligations; adding scale; and balancing strategies emanating from their nonprofit status and/or private ownership with the need to generate...
