Blue Shield is the only major California insurer whose profits and administrative expenses in 2015 exceeded Obamacare maximums, requiring it to pay rebates this fall.
By reporting costs resulting from administrative errors as medical expenses, Blue Shield appears to have shortchanged customers on rebates required by Obamacare’s limits on profits and administrative expenses.
Blue Shield made a huge Obamacare profit in 2014 partly by hindering access to care. That triggered a $107-million-excess-profit tax that it then forced enrollees to pay, at a cost of $223 each.
The most profitable Obamacare insurer in 2014 was a nonprofit health plan--Blue Shield of California.
Nonprofit Blue Shield is planning to include in its Obamacare rates for next year the highest profit and administrative expense margin of any California health insurer.
Blue Shield spent just 72% of Obamacare premiums on medical care in 2014, with the rest going to profits and administrative expenses.
Blue Shield must pay rebates of over $100 per enrollee and hand over to the government $93 million in excess profits because it overcharged for Obamacare coverage in 2014.
Blue Shield is overpaying favored information technology vendors by millions of dollars, according to a lawsuit by a former Blue Shield vice president.
Blue Shield has built a stockpile of $4.2 billion in retained profits--far more than it needs in reserves to guarantee payment of claims. But it refuses to use the excess to lower rates.