SAN FRANCISCO (KCBS) – Blue Shield of California promised Tuesday to cap its profit margin and give any extra money directly to policyholders.
Because the pledge applies retroactively, 2010 Blue Shield customers will start getting credits this year.
Blue Shield of California CEO Bruce Bodaken said in years when profits go over two percent of revenue, the company will return any excess profit to policyholders.
“This is a step Blue Shield is taking to address the cost of care and insure that affordability is put before profits,” Bodaken said.
KCBS’ Anna Duckworth Reports:
The company has been under fire in recent months for steep policy hikes and for Bodaken’s high salary – more than $4 million last year.
Shana Alex Laverreda with UCLA’s Center for Health Policy Research said the $167 million going back to policyholders for excess profits from last year is a move to smooth those waters and keep customers from leaving Blue Shield.
“The problem is that $167 million sounds like an awful lot of money, but really when it gets down to the individual, and the individuals are the ones making the decision whether or not to stay with Blue Shield, they’re only going to be getting about $80,” she said.
Blue Shield’s 30 percent credit will go back to policyholders on one of this year’s monthly bills. It does not apply to those with employer plans.
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