Blue Shield Of California Will Cap Earnings
As part of a new initiative to hold down costs, the insurer announced yesterday that it will cut this year's premiums by 2.5 percent for many of its policy holders.
Los Angeles Times: Blue Shield Of California To Cut Many Premiums 2.5% This Year
Health insurer Blue Shield of California, under fire for a series of recent rate hikes and the pay of its chief executive, plans to cut this year's premiums by 2.5% for many of its 3.3 million policyholders as part of a new initiative to hold down costs (Helfand, 6/8).
The New York Times: California Insurer Says It Will Cap Earnings
Blue Shield of California, a large nonprofit health insurer that has come under sharp criticism in recent months for its double-digit rate increases, said on Tuesday that it planned to cap its earning and refund the bulk of any excess income to its policyholders (Abelson, 6/7).
The Wall Street Journal: Insurer Sets Earnings Cap
Blue Shield of California said it would limit how much of its earnings it keeps, amid public pressure to control health costs. The nonprofit said it would cap its annual net income at 2% of revenue, a pledge that could put pressure on other insurers at a time when the industry's profits have been strong (Mathews, 6/8).
CNN Money: Blue Shield Of California Pays Back $180 Million
Blue Shield of California, one of the largest insurers in the state, says it has enacted a new rule that will allow it to pay back its customers $180 million in excess profit. The new rule limits its annual income to 2% of revenue and requires any profit in excess of that to be returned to customers and the community. The rule is being implemented retroactively to 2010 when the insurer earned $315 million in profit and $10 billion in revenue (Kavilanz, 6/7).
In other insurance industry news -
Modern Healthcare: Justice Dept. Lawsuit Against Mich. Blues Moves Forward
A federal judge in Michigan has issued an early defeat against Blue Cross and Blue Shield of Michigan, denying a motion to dismiss an antitrust lawsuit filed by the Justice Department that accuses the insurer of using its leverage in the market to drive up costs for nonmembers. The ruling, which was issued orally from the bench Tuesday afternoon, means that the case can move closer to trial (Carlson, 6/7).