In fulfillment of its late spring pledge to limit net income to 2% of revenue, Blue Shield of California Chairman and CEO Bruce Bodaken announced today that the not-for-profit company will return approximately $295 million to its customers and to the community by the end of the year.
Blue Shield first made its pledge in June and announced that it would return $180 million in October to offset net income earned above the 2% threshold in 2010. That has been completed. Today’s announcement is based on the company’s estimated 2011 earnings.
California Insurance Commissioner Dave Jones lauded the voluntary action to cap profits, but took the opportunity to reprimand other health insurers in the state for inaction.
“This is good news for Blue Shield policyholders who will save money on their health insurance premiums this year… Unfortunately, other health insurers and HMO’s show no indication that they intend to cap skyrocketing profits or rates, which is why we still need the State Senate to pass AB 52 to give me the authority to reject excessive rate hikes,” Commissioner Jones stated.
Insurers in the state are raking in profits since the fiscal crisis in 2008. The five largest health insurers in this country made a combined profit of $11.7 billion last year, the commissioner noted, citing news reports, and contrasting the profits to struggling families and businesses in the faltering economy.