Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Life Health > Health Insurance > Your Practice

The Catch: The 2% Solution

Your article was successfully shared with the contacts you provided.

Blue Shield of California is forging ahead with its strategy of trying to be so well-behaved the California Department of Insurance and other state regulators will leave it alone.

California Blue Shield, San Francisco — which is separate from Blue Cross of California — says it is in  the process of making good on a pledge it made earlier this year to hold its net income to 2% of revenue.

The company will provide credits ranging from 18% to 54% of customers’ December bills to avoid letting net income rise over 2%, the company says.

The credit is based on the dues or premiums customers were paying in August, the company says.

California insurance regulators now have the legal authority to review proposed rate increases and object to what they believe to be unreasonable or poorly justified rate increases, but they do not have to reject big rate increases, as regulators in some other states do.

Consumer Watchdog, Santa Monica, Calif., is in the process of trying to get a referendum that could give state regulators the authority to control health insurance rates on the November 2012 general election ballot. The group says a recent referendum conference call attracted 1,500 participants.


EHealth Inc., Mountain View, Calif. (Nasdaq:EHTH), reports that 19% of Medicare Advantage and Medicare Part D prescription drug plan enrollees over age 65 are not aware that the current Medicare open enrollment period is set to end Dec. 7 — a week from Wednesday.

EHealth, the parent of the and websites, has based that figure on results from a national telephone survey conducted in October. The participants were 711 adults ages 65 and older who live in the continental United States.

The company found that 86% of enrollees with annual incomes under $35,000 know the deadline is coming but that only 72% of enrollees with incomes from $35,000 to $50,000 understand the schedule.

The percentages have improved since August, when 65% of all Medicare Advantage and Part D enrollees were unaware of the cut-off, eHealth says.


Paul Keckley, executive director of the Deloitte Center for Health Solutions, Washington, says of the recent failure of the congressional Super Committee to come up with more than $1 trillion in budget cut proposals that “a skeptic might conclude the political environment in Washington is so toxic that compromise is virtually impossible.”

Keckley says health care costs are obviously contributing to frightening federal budget deficit problems.

“The failure of the system to control its costs is in large measure attributable to our benign neglect to engage individuals and their families as THE primary customer,” Keckley writes in  a commentary. “Our tradition is to call them ‘patients’ and assume they will be. They’re not ‘patients’ nor ‘patient,’ nor enrollees, nor subjects—they are consumers. And they will increasingly demand more value for the dollar they spend in the system.”


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.