California Blue Shield announces that it will cap its earnings at 2% and credit the policy holders if it exceeds the limit. This should make policies more affordable based on the company’s performance, starting with last year’s performance. Roughly $167 million dollars will go to policy holders in the form of an overall average 30% credit towards one month’s premium. Hospitals and physicians that participate in special cost-savings programs will receive $3 million. What does this actually mean to Blue Shield members? Well, it breaks down to a $80 dollar credit for individual policy holders, $250 for families of four on their October 2011 bill. Businesses with fewer than 50 employees receive $125 dollar credit for one person and $340 for families of four. Individuals and Employers will be receiving notification directly from Blue Shield if they qualify for this premium adjustment.
The net income cap set is at 2% revenue and will take into consideration of how much they are allowed to invest. Blue Shield has drawn unwanted attention recently, regarding the amount their top executive was making ($4.6 million). They have also had issues with recent reforms such as rationalizing any rate increases that are above ten percent, and paying a certain amount of premium dollars received to raising the quality of medical care and improvements. Even though Blue Shield faces allegations of excessive rate hikes they maintain that they are doing their part for the Affordable Health Care Act. Blue Shield is the first major carrier to announce any form of premium return in California to date. Based on the new rules of Health Care Reform, other carriers may be following suit in the future.
If you do not have health insurance already, maybe it is time to get some. We at Sweeney & Sweeney Insurance Services have been providing quality health insurance for Chico and the Butte County area for over 20 years. Contact us today or find us on Facebook and twitter.
Sources:
http://www.nytimes.com/2011/06/08/health/08health.html?_r=1&ref=health
http://money.cnn.com/2011/06/07/news/companies/blue_shield_california_premium/index.htm
http://www.bloomberg.com/news/2011-06-07/california-s-blue-shield-to-cap-net-income-and-pay-rebates-on-excess-cash.html