Highmark posts $533M profit in 2023, reversing dismal performance in 2022

After losing money in 2022, Pittsburgh's Highmark Health rebounded last year.

The health insurance giant posted net income of $533 million even as it grappled with operating losses at its Pittsburgh-area hospitals.

That compares with a $346 million loss in 2022, due largely to struggling investments during a bear market, officials said Monday during a conference call on Highmark's 2023 financial results.

The insurer's investment portfolio bounced back last year, officials said.

That, and a surge in the number of health insurance customers, helped to improve year-end financial results, according to officials.

Highmark reported $27.1 billion in revenue for 2023, up more than 5% from nearly $26 billion a year earlier.

The health care company posted an operating gain of $338 million, down from $440 million in 2022.

Highmark did not break out its investment gains.

In 2022, the company reported a net loss of $346 million on $25.8 billion in revenue, said Highmark spokeswoman Emily Gauthier.

Highmark CEO David Holmberg said the Pittsburgh-based company remained the largest health insurance provider in Pennsylvania, Delaware, West Virginia, and Western New York.

He said Highmark has boosted the number of people enrolled in its health insurance plans to about 7 million, up from 5.3 million a decade ago.

That growth has been instrumental to improving the company's bottom line his year, Holmberg said.

The number of people on Highmark's Affordable Care Act plans doubled between 2021 and 2023, Holmberg said, adding that the company expanded into the southeastern Pennsylvania market last year.

Highmark did not provide specifics on health insurance plan growth in 2023 from a year earlier.

But Emily Gauthier, a Highmark spokeswoman, said the company added about 71,000 new patients on Medicaid and Affordable Care Act plans between February 2023 and this Feburary.

"In every part of our business, the most important point is that people are choosing our services because they value it," said Holmberg.

Highmark employs 44,000 people across the country and internationally.

Highmark said it maintained $11 billion in cash reserves, as well as investments and net assets worth $10 billion as of the end of 2023.

Gains in several parts of Highmark's portfolio overcame losses at Allegheny Health Network, a Highmark subsidiary that runs more than a dozen hospitals across the greater Pittsburgh region.

Allegheny Health Network saw an operating loss of $173 million in 2023, which is a slight improvement on its its $180 million operating loss a year earlier.

The local hospital network cared for more people in 2023, with patient volumes up 7% compared to the year earlier.

Allegheny Health Network is still dealing with rising costs from inflation and a persistent nursing shortage.

Jim Benedict, president of Allegheny Health Network, said Highmark's profits and strong fund balance puts it in position to boost efforts to tackle the nursing shortage through tuition reimbursement for nursing school and increased recruitment efforts at high schools and community colleges.

Holmberg added that Highmark intends to up its hourly minimum wage by $2 to $18, which should also help address staffing shortages. The increase will take effect by the end of this year.

"It puts pressure on us financially, but we believe in the long game it is the right thing to do," Holmberg said.

Ryan Deto is a TribLive reporter covering politics, Pittsburgh and Allegheny County news. A native of California's Bay Area, he joined the Trib in 2022 after spending more than six years covering Pittsburgh at the Pittsburgh City Paper, including serving as managing editor. He can be reached at [email protected].

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