Blue Shield credits $167M to customers, limits profits

Blue Shield of California is making good on its word of limiting annual profits to 2 percent of revenue by issuing credits to customers. CEO Bruce Bodaken pledged to cap profits after the insurer's steep rate hikes and executive compensation received negative publicity and outraged the public, according to the San Francisco Business Times.

The credits, which will be reflected in customers' October bills, will range from 10 percent to 30 percent of one month's premium, translating to about $80 for the average individual customer and $250 for the average family of four, reports the Fresno Bee. Meanwhile, middle and large group customers will receive a $110 to $130 credit per employee, and small groups will see a $125 credit per employee and $340 for a family of four.

In total, Blue Shield will credit $167 million to individual and employer customers. Another $10 million of its $180 million surplus will go to physicians and hospitals participating in new coordinated models of care and the remaining 3 percent will go to Blue Shield's philanthropic foundation, the San Francisco Chronicle reports.

"When we first made this commitment, it was to help keep coverage affordable for our membership," said Blue Shield spokesman Stephen Shivinsky. "While this is a small step, we also think everybody in the healthcare industry should take a look at what they can do to reduce the cost of healthcare."

To learn more:
- see the San Francisco Chronicle article
- read the Fresno Bee article
- see the San Francisco Business Times article

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