Like several other health insurers, Blue Cross and Blue Shield of North Carolina has big plans for what it wants to do with the savings headed its way from the newly lowered corporate tax rate.
For one, the insurer announced this week that it will invest $50 million in community health initiatives—with $40 million of that funding coming from tax savings. Of that $50 million total, $10 million will go toward addressing the opioid epidemic, and another $10 million will go to early child development programs.
In addition, the insurer will invest $15 million each toward addressing social determinants of health (for example, helping fund a new Family Justice Center), and community programs aimed at bolstering primary care.
“Healthy communities are foundational for healthy North Carolinians,” BCBSNC President and CEO Patrick Conway, M.D., said in a statement. “As a practicing pediatrician, I know investments to improve early childhood development and address social determinants of health lead to better health outcomes and lower costs.”
The insurer won’t know exactly how much savings it will glean from the new tax overhaul until the end of the year, a spokesman told FierceHealthcare via email. However, BCBSNC is confident that its savings will be enough to cover its new community investments as well as additional initiatives it announced on Thursday. Those include giving a one-time $1,000 bonus to all nonofficer employees, investing in new consumer-facing technologies, and lowering premium increases for future health plans, beginning with those that renew Oct. 1.
Health insurers will be most affected by the portion of the tax law that lowers the corporate tax rate from 35% to 21%. The country’s largest publicly traded insurers are already seeing that benefit their bottom lines, and have also announced what they plan to do with future savings.
Both Humana and Anthem plan to use part of the windfall to raise the minimum wage for their employees, to $15 an hour and $16 an hour, respectively. Anthem will also contribute $1,000 to the 401(k) accounts of each of its associates, while Humana will accelerate a performance-based incentive program for employees.
Both of those companies, as well as insurers including UnitedHealth and Aetna, will also return some of the savings to shareholders and use some of the money to invest in strategic business initiatives.