BSCA Revenue Cap Draws Mixed Reactions

Margaret Dick Tocknell, for HealthLeaders Media , June 10, 2011

Jones supported AB 52, a California bill, which would give his office the power to review and reject insurance rate hikes. The bill passed through the legislature this week and awaits the governor's signature. 

In an editorial in the San Francisco Chronicle, Jamie Court, the president of Consumer Watchdog, called the 2% announcement a "last-ditch attempt to discourage legislators" from passing AB 52. "For a not-for-profit health insurance company like Blue Shield, which has more than $3.6 billion in reserves, that's 2% too much."

The company's reserve of $3.6 billion is a sticking point. The DOI's Jones said the $3.6 billion is considerably in excess of what is required to meet state financial solvency requirements. In media interviews he has said the amount begins the question. "If Blue Shield has this much in its reserves, then why is it not giving more money back to its policyholders?"

Consumers Union reported in 2010 that over the past decade, nonprofit Blue Cross and Blue Shield health insurers across the country stockpiled billions of dollars in surplus--while raising premiums for consumers by as high as 20% annually.

The CU report may be downloaded here.

Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.
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1 comments on "BSCA Revenue Cap Draws Mixed Reactions"

mrrogers (6/10/2011 at 10:13 AM)
I suppose the big government types would be happier if BSCA just pissed away the money on excess expenses (like the government does) rather than build reserves to a level beyond the "minimum" required by the bureauocrats. Which approach best serves the long-term interest of policyholders [INVALID] hmmmm.




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