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States Eye Surplus Capital At Nonprofit Health Plans

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NU Online News Service, June 22, 2004, 5:23 p.m. EDT

Several states want to make nonprofit health plans return surplus capital to consumers.[@@]

North Carolina, Pennsylvania and Rhode Island all are requiring or planning to require Blue Cross and Blue Shield plans to return some of their surplus to plan members, according to Standard & Poor’s Ratings Service, New York.

S&P has criticized a new North Carolina surplus-return proposal. That proposal, included in a bill now before state lawmakers, would require that Blue Cross and Blue Shield of North Carolina, Chapel Hill, N.C., correct any surplus above an indicated level within a short timeframe, S&P says.

“As it is currently written, this proposed legislation could have a negative impact on the BCBSNC rating if it becomes law,” S&P says.

S&P has assigned North Carolina Blue an A plus insurance rating.