NU Online News Service, Sept. 4, 2:45 p.m. – Highmark Inc., Pittsburgh, is trying to defend its need for a high level of surplus.
Highmark, the parent company of Blue Cross and Blue Shield of Western Pennsylvania, ended June with 2.34 months of surplus on hand, and it wants to have 2.5 to four months of surplus available to pay for medical claims and administrative expenses, John Brouse, the company’s president, testified today at a Pennsylvania Insurance Department hearing.
Highmark must remain financially strong to cope with the current economy, Brouse said, according to a prepared version of his remarks.
“When pension funds and life-long savings can disappear in the wake of economic downturns or corporate mismanagement, it is critically important that our customers know that we will pay their claims,” Brouse said.
Highmark also needs a strong surplus position to protect itself against major catastrophes and to keep its computer system up to date, Highmark officials said.
Highmark provides or administers major medical coverage for 4.8 million people.