Blue Shield of California policyholders get money back

Some policyholders and some money. The health insurer is giving back $167 million, which covers a 30 percent credit on one monthly bill this year - but only for those with individual plans. For a family of four, that averages $250. More money is expected to be returned in future years, It's all part of a PR campaign being engineered by CEO Bruce Bodaken and comes after months of criticism for Blue Shield jacking up rates. From the LAT:

Bodaken called the company's "2% pledge" the first of its kind in the country. He said that in addition to the $167 million going back to customers this year, Blue Shield will give another $10 million to doctors and hospitals that coordinate care through so-called accountable care organizations. Another $3 million will go to the Blue Shield of California Foundation to support safety net programs.

From his opinion piece in the SF Chronicle:

We will cap our net income at 2 percent of revenue. If at the end of any year our net income is more than 2 percent because medical costs were lower or investment income was higher than we had projected, we'll return that amount to our members and the community. This is a long-term commitment and, we believe, the first of its kind in the country. We are committed to the 2 percent pledge so long as our board of directors determines that Blue Shield remains financially solvent, with sufficient funds to make the investments needed to stay competitive.

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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
 
Mark Lacter, business writer and editor was 59
The multi-talented Mark Lacter
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