The report cites several examples, including:
- Blue Cross Blue Shield of Arizona raised rates for its individual market customers between 14.5% and 19.4% in 2007, 13.1% and 15% in 2008, and 8.8% to 18.4% in 2009. During that time, the company's surplus grew from $648.3 million to $717.1 million, which is more than seven times the amount that regulators consider to be the minimum necessary for solvency protection.
- Health Care Service Corporation (HCSC), doing business as Blue Cross Blue Shield of Texas, Illinois, New Mexico and Oklahoma, raised rates in Texas on some individual and family plans multiple times in a year between 2007 2010. At the same time, HCSC's surplus grew from $6.1 billion in 2007 to $6.7 billion in 2009--up from $4.3 billion four years earlier in 2005; the company's surplus was five times the minimum required for solvency protection.
In one response, Blue Cross Blue Shield of Arizona said that similar to a family's savings account, it sets aside money in reserves to pay for unexpected health care claims and other expenses. "The amount we have in our reserves equals six months of expenses—an amount that ensures our future stability and ability to provide health care services to our customers," it said in a statement.
Consumers Union proposed that the companies holding excess surplus should use that money to:
- Set up a "rate stabilization fund" designed to moderate premium increases going forward,
- Refund policyholders the amount that they overpaid in premiums that contributed to the excessive surplus, or
- Spend the money for charitable purposes like community health programs or affordable coverage initiatives.
The BCBS plans studied in the report are: Blue Cross Blue Shield of Alabama, Blue Cross Blue Shield of Arizona, Blue Cross Blue Shield of Massachusetts, Blue Cross Blue Shield of Michigan, Excellus Blue Cross Blue Shield (New York), Blue Cross Blue Shield of North Carolina, Regence Blue Cross Blue Shield of Oregon, Blue Cross of Northeastern Pennsylvania, Blue Cross Blue Shield of Tennessee, and Blue Cross Blue Shield of Wyoming.
Janice Simmons is a senior editor and Washington, DC, correspondent for HealthLeaders Media Online. She can be reached at firstname.lastname@example.org