Grand Rapids, Mich. — Two of Michigan’s dominant health insurers, Blue Cross Blue Shield of Michigan and Priority Health, reported significant financial losses in 2024, largely attributed to sharply rising prescription drug expenses.
Blue Cross Blue Shield, headquartered in Detroit and controlling a substantial share of the state’s healthcare market, announced losses exceeding $1 billion last year. The insurer spent approximately $2.7 billion more on pharmaceuticals in 2024 compared to 2022, according to a recent Crain’s Detroit Business report.
Priority Health, based in Grand Rapids and also a major player in Michigan’s insurance landscape, reported a $53 million operating loss for 2024. These mounting losses have prompted both companies to raise premiums for policyholders in 2025. Blue Cross Blue Shield received approval for an 11% premium increase, while Priority Health plans to implement a 13% rate hike in the latter half of the year.
Industry representatives from Blue Cross described the current healthcare market environment as “unsustainable,” underscoring the financial strain caused by escalating drug prices.
The federal government has taken steps that may alleviate some of this pressure. On May 12, President Joe Biden signed an executive order aimed at reducing the cost of branded prescription medications for U.S. consumers. The order directs pharmaceutical manufacturers to align their drug prices in the United States with those charged in other comparable international markets.
Currently, the U.S. pays significantly more for prescription drugs—often up to three times the price seen in other wealthy countries. Pharmaceutical companies argue that high domestic prices are necessary to fund extensive research and development efforts, warning that cuts could impact innovation.
For now, insurers like Blue Cross Blue Shield and Priority Health await further developments, hoping the executive order will facilitate meaningful negotiations with drug manufacturers to lower costs and stabilize the market.
