Highmark loses $69M through 3rd quarter, dragged down by insurance costs

Highmark Health took a $69 million net loss in the first nine months of the year as the Pittsburgh-based company struggled with more frequent and costly health insurance claims.

The organization’s insurance arm, Highmark Health Plans, had a $211 million operating loss through September, according to financial results released Monday.

The losses were somewhat offset by $79 million in operating income from Allegheny Health Network and $29 million in operating income from the company’s diversified businesses, which include United Concordia Dental and stop-loss insurer HM Insurance Group.

The overall operating loss totaled $204 million — a rapid undoing of $121 million in operating income through the first half of the year.

Operating losses for Highmark Health’s various businesses do not add up to the total figure because certain items are not attributed to a specific division or are removed to avoid being double counted.

Getting the health plans to a place of profitability will be a “multi-year journey,” Carl Daley, chief financial officer and treasurer of Highmark Health, said on a call Monday with other executives.

Highmark Health officials expect challenges with claims to continue for the foreseeable future. Next year’s insurance offerings partly reflect those higher costs, but the plan designs won’t fully adjust to this new reality until 2027, according to Kate Musler, chief financial officer for Highmark Health Plans.

Just as high use of health care services hurt Highmark Health’s insurance side, it buoyed its Allegheny Health Network arm.

Since the start of the year, the hospital system has seen increases of 4% in inpatient discharges and observations, 6% in outpatient registrations, 7% in physician visits and 5% in emergency room visits.

A rise in patients during the first quarter of 2025 — when Highmark Health turned a nominal operating profit — came as a result of flu and RSV season, according to Brian Devine, chief financial officer for Allegheny Health Network.

“Since then, we have really worked to get back up to those first-quarter volume levels more organically,” Devine said, referring to efforts to add more physicians and see more patients.

The uneven results come as Highmark Health expands its reach as an insurer and provider.

In October, Allegheny Health Network said it’s acquiring two-hospital Heritage Valley Health System. And last week, Highmark Health Plans announced plans to affiliate with Blue Cross and Blue Shield of Kansas City, Missouri’s largest nonprofit health insurer.

Both deals are expected to take effect next summer after regulatory approvals, Daley said.

“We are open to future expansion as those opportunities arise,” he added.

The overall organization had nearly $25 billion in revenue through September.

Its cash and investments remained at roughly $12 billion, and its assets at about $10 billion.