A new report from Business North Carolina should reset how we think about the healthcare cost crisis in North Carolina. We are one of — if not the — most expensive states for healthcare in the country. But why?
A look at financial reports offers some answers.
Business NC recently reported that the state’s largest insurer, Blue Cross and Blue Shield of North Carolina, posted a $497 million loss in 2025, as revenue dropped and medical claims surged by nearly $1.8 billion in a single year.
Insurers are often viewed as the financial giants driving up the cost of healthcare. In light of these losses, it’s worth taking a closer look at the facts.
The Real Story: Costs Are Exploding
The data tells the story. When claims jump nearly 16% in a single year, and costs soar like we have seen, the driver is straightforward: hospitals, procedures, and outpatient services are getting more expensive — and being used more often.
That matters because premiums are built directly off those costs.
Insurers collect premiums upfront, then use those dollars to pay medical claims. When the cost of care rises, the amount insurers must pay rises with it. If those higher costs persist, they don’t just disappear — they get built into next year’s premiums.
So when utilization and the cost of care spike, it shows up everywhere — tighter margins for insurers, higher premiums for employers, and bigger bills for families.
Meanwhile, Hospitals Are Profitable
Now compare that to the financial performance of North Carolina’s largest hospital systems. According to Business NC:
- Atrium Health reported $1.4 billion in net income
- Novant Health reported $1.2 billion in net income
That contrast matters.
Large hospital systems continue to generate significant surpluses, fueled by the prices they are able to charge for care. Insurers pay those costs, and when they rise substantially, the result is the losses and premium increases we’re seeing.
This Is a Price Problem
Too often, the conversation around healthcare affordability focuses on insurers — premiums, coverage decisions, or administrative costs.
But the numbers tell a different story.
If insurers are losing money while major provider systems are posting billion-dollar gains, the core issue isn’t who is collecting premiums.
It’s what providers are charging for care.
Higher prices plus more claims equals higher premiums.
That’s the cycle driving costs upward across the system.
The Bottom Line
North Carolina isn’t facing an insurance crisis — it’s facing a healthcare price crisis.
Until policymakers and stakeholders take a serious look at the cost of care, the pressure won’t ease.
Premiums will keep rising. Employers will keep struggling. Patients will keep paying more.
Because in the end, every dollar in the system has to come from somewhere — and go somewhere.
Right now, it’s coming from North Carolinians, and it’s going to our largest hospital systems.
.jpeg)
