Everyone loves a comeback story, and there is arguably no bigger one than what leadership insists is happening at Arkansas Blue Cross and Blue Shield. The not-for-profit health insurer, ranked among the state’s largest companies, has faced myriad challenges both internally and externally, from flagging revenue and job loss to rowing against negative tides in the marketplace.
Curtis Barnett, president and CEO, does not shy away from discussing the company’s struggles over the past few years, a strategy he has taken with leadership and frontline employees alike as the company works to regain momentum. His candor about things CEOs generally do not like to talk about is striking and intentional; one cannot change a circumstance one does not understand, and to that end, he is forthright to the point of blunt when laying out what lies ahead, the good and the bad, be it to his workforce or to the press.
“We’re over 75 years old. I’ve been with the company 32 years now,” he said. “I’ve seen a lot in those 32 years, and I’ve never seen an environment like the one that we’re working in right now.
“We’ve taken our organization from A to Z and looked at every aspect of that, looking at our technology stack, looking at our vendor contracts, looking at where there’s opportunities to save. We’ve done a number of things there to try to make sure that we’re operating just as efficiently and effectively as we possibly can, and we’re going to continue to do that going forward.”
Barnett’s plainspoken style when discussing the company’s challenges does nothing to dilute the enormity of issues before it. Arkansas Blue Cross and Blue Shield lost $226.2 million in 2024 and, in the wake of that, cut its workforce by 75 positions. The company suffered additional bad press for a healthy rate hike last year, as well — a 25.5 percent increase savaged by Gov. Sarah Huckabee Sanders.
“Arkansans are tired of getting outrageous bills from multibillion-dollar insurance companies, and my administration will not allow them to take advantage of our people,” she said in an August statement. “Nothing justifies year-over-year premium increases of this scale.”
Barnett said the company’s continued progress, which last year saw the firm claw its way back into break-even territory, is tied to more than the cost of premiums despite what headlines and negative publicity have to say.
“We’ve viewed this as a multiyear effort, and only some of it’s been on the revenue side,” he said. “We’ve had to get revenue where it covers claims cost, which resulted in some bigger-than-normal increases for a lot of our customers. They feel that pain, and we feel that pain as a result of that, so that’s been part of it.
Barnett is leading Arkansas Blue Cross into a partnership with Cambia Health Solutions.
“But a lot of that’s been on the cost-management side, as well, both on the claims cost piece of that, as well as our administrative cost and so on. The claims cost, I think we’re doing a much better job identifying high-dollar claimants earlier, managing those, trying to make sure that we’ve intervened where it’s appropriate to get them either to a lower-cost setting or that they’ve got the follow-up care they need.”
Barnett was quick to point out that the company is not unique among its peers and that all are suffering under the weight of health care costs and other market pressures that border on the existential. That’s not just individual insurance companies talking, either, but the findings of third-party ratings services.
“Like every industry, we have credit-rating agencies that study the industry and companies and make evaluations based on strength and outlook and things like that,” he said. “Two come to mind immediately; one is AM Best, and the other is Fitch and Fitch. In the last few months of 2025, they gave their outlook for 2026, and both downgraded the industry. I think AM Best went from stable to negative, and I think Fitch went from neutral to deteriorating.
“They really pointed to three main factors. One is just the elevated cost trends that we’re seeing in our industry right now across the board — all lines of business, all companies, all payers. A second one is really around instability in the government markets, and a lot of that was being shaped by the debate that we’ve heard so much around the enhanced tax subsidies of the Affordable Care Act individual marketplace.
“The third one is around regulatory and policy uncertainty in general. A good example of that would be CMS releasing their payment rates for Medicare Advantage plans that are private companies basically providing policies that replaced Medicare Part A and Part B. It’s been a growing marketplace, and last year, it was nearly a 6-percent adjustment in the payment rate, which is basically flat, so CMS is saying no increase in an environment where we’re seeing the average cost increase by 8.5, 9.5 percent.”
In addition to the national trends, variances by state also come into play, Barnett said. Arkansas’ poor position among states for things such as obesity, smoking and poverty affect insurance carriers as more people put off medical issues due to economics, resulting in higher-cost treatment versus lower-cost prevention and wellness options. In 2024 alone, Barnett said, the company saw a 15-percent uptick in claims exceeding $1 million.
“I don’t think there’s any question that those things put additional pressure not only on our company as a payer who predominantly works in the state of Arkansas but also the providers here, as well. That puts pressure on the entire system,” he said. “People with not only just one chronic condition but multiple chronic conditions in many cases are experiencing other social needs, whether it be food insecurity or housing or maybe education levels, all of which are things that can complicate health issues. All those things play into some of these challenges that we’re facing.
“Something that I would like people to know is that the mission of Arkansas Blue Cross Blue Shield is to improve the health, financial security and peace of mind of the members and communities we serve. How can we keep our members healthier and not just finance their health care? How can we work in partnership with delivery systems to improve? We’re working through that right now.”
One aspect the company is pursuing to meet challenges is through partnerships. The company announced in November it had signed a definitive agreement to form a strategic affiliation with Cambia Health Solutions in Portland, Oregon. The move, subject to approval by the Arkansas Insurance Department, brings Arkansas Blue Cross Blue Shield into a Cambia network that includes other state Blue Cross affiliates. That will mean shared cost and reduced expenses, as well as other competitive benefits, Barnett said.
“We began about three years ago, coming out of the [COVID-19] pandemic,” he said. “We said, ‘OK, what’s the future going to look like?’ We could see some of the pressures that we’ve been talking about, although we may not have completely predicted the full impact or the timing of when they would hit. We recognized then that we were probably going to have to make some changes to our business model to be able to continue to serve Arkansas and to serve the members that we take care of in the way that they need us to.
“We began thinking about how scale is going to be needed. We’re not a proponent and believer that bigger is always better, but we do feel like in some cases, more is necessary, especially in the environment that’s emerged. Cambia is already a multistate company today. They operate in four states, and so they had a multistate model. We found an affiliation model was the best fit for us.”
Curtis Barnett
Under the agreement, nothing changes as far as customers interfacing with Arkansas Blue Cross and Blue Shield, which will retain its brand identity, governing board and own its own assets yet benefit from greater efficiencies and the ability to participate in larger deals than it might have as a standalone.
“Health care is local, and problems are still going to have to be solved at a local level,” he said. “This will allow us to be that strong local company while also allowing us to be able to work and to share in the scale of a larger organization where those types of resources are needed.”
Barnett said he appreciates the stress that comes with the level of change that has come the company’s way over a very short period of time and the effect that could potentially have on employees and policy holders alike. On the plus side, he said, the company’s path forward, like the steps achieved in 2025, is in the hands of a capable team.
“I will give our leadership and our employees strong marks for resilience in a time of a very turbulent industry,” he said. “I think the work that we’re doing now, the work we’ve done over the last few years, is more consequential than perhaps any time in the history of our company. I think they deserve credit for that.”
Photos by Jane Colclasure
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