Health Care Service Corporation
| Company type | Mutual Legal Reserve Company |
|---|---|
| Industry | Health insurance |
| Founded | 1936 |
| Headquarters | Chicago , United States |
Area served | Illinois, Montana, New Mexico, Oklahoma, Texas |
| Products | Health insurance, group life insurance, disability coverage, dental plans, individual insurance, care management, wellness programs |
Number of employees | 35000+ (2019) |
Health Care Service Corporation (HCSC), classified as a Mutual Legal Reserve Company, operates as a member-owned health insurance provider within the United States. Established in 1936 and headquartered in Chicago, Illinois, HCSC maintains offices across the country and holds licensing rights from the Blue Cross and Blue Shield Association for five states: Illinois, Montana, New Mexico, Oklahoma, and Texas.
Ranking fifth among health insurers nationwide, HCSC employs more than 35,000 individuals. By 2019, it was recognized as the third-largest commercial health insurer, serving close to 16 million members. The company’s portfolio includes group life insurance, disability coverage, dental plans, various individual insurance options, along with care management and wellness programs.
Geographical area of operations
In 2015, the bulk of HCSC’s revenue originated from Illinois and Texas, which together made up 84% of total income during the first nine months of 2014; Oklahoma followed with a 9% share. By late 2017, premium revenues from Illinois and Texas accounted for 83%, while Oklahoma contributed approximately 9%.
In January 2020, HCSC announced plans to reduce its workforce by around 400 employees, mainly targeting middle management positions. This move was intended to streamline operations by removing redundancies and improving decision-making processes.
Educational opportunities
On May 1, 2019, HCSC introduced Blue University, an internal educational initiative designed to enhance employee competencies. The curriculum emphasizes healthcare management, leadership development, marketing and sales strategies, technology integration, and service delivery excellence. Furthermore, HCSC collaborates with regional universities to provide staff with access to master's degree programs and professional certificates.
Financial information
By 2014, HCSC stood as the largest privately held health insurer in the U.S. and ranked fifth overall, with a membership exceeding 16 million. This membership number remained stable through the end of 2019. Premium revenue was notably concentrated geographically; in 2017, Illinois and Texas accounted for 83% of total premiums.
In 2010, the company nearly doubled its earnings to $1.09 billion, marking its fourth consecutive year with profits surpassing one billion dollars. From 2009 through 2013, HCSC achieved an average return on capital of 10.5%. However, profitability declined in 2014 due to increased medical losses and expenses linked to rapid growth in Affordable Care Act exchange members. Despite these challenges, Fitch Ratings affirmed an 'A+' financial strength rating and an 'A' rating for default risk in 2015, citing limited geographic diversification as a constraint against a higher 'AA' rating.
After experiencing ACA-related losses in previous years, HCSC returned to robust underwriting profits in 2017. By mid-2018, it reported an annualized return on capital surpassing 40%, aided by an $833 million income tax benefit stemming from the Tax Cuts and Jobs Act. Nevertheless, results were anticipated to moderate later in 2018 as policyholders met their deductibles and claims expenses increased.