Blue Shield health insurance holders in California will see a one-time credit of up to 30% in their premium bill this October. It’s part of the pledge the company made Tuesday to cap its net income to two percent of revenue – indefinitely. Paul Markovich of Blue Shield of California says he hopes it’s a relief to customers, “and we hope to prompt a conversation with lots of others in the industry about this affordability crisis.”
The company is returning $167 million to policyholders, and donating another 13 million to health organizations. But California Insurance Commissioner Dave Jones says the move is proof that stronger health insurance regulation is needed in California.
“It’s an admission that a non-profit has been making excessive profits and therefore needs to return some of it to its policy holders,” Jones said.
Jones adds Blue Shield saw a doubling of its profits from 2009 to 2010, and has a reserve of 3.5 billion dollars.