Blue Shield of California to give $167 million back to some customers


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Embattled health insurer Blue Shield of California is planning to give back $167 million to some policyholders this year and to return more money in future years.

Bruce Bodaken, chief executive of California’s largest nonprofit health insurer, says that individual policyholders –- but not people with employer plans -- will get a 30% credit on one monthly bill this year. That will average $80 for an individual policyholder and $250 for a family of four.


Blue Shield’s initiative, to be spelled out in detail Tuesday, comes during a tough year for the San Francisco insurer. The company has weathered criticism in recent months for big rate increases and Bodaken’s salary -– he earned $4.6 million last year.

Bodaken said the company will continue to return money to policyholders in subsequent years when its net income exceeds 2% of revenue. That was the case in 2010, Bodaken said, and so Blue Shield is now planning to give back the excess.

Bodaken is rolling out the announcement in a carefully orchestrated campaign. He outlined the new initiative in a commentary in the company’s hometown newspaper, the San Francisco Chronicle. He also is briefing reporters and outlining the new effort in a noon speech at the Commonwealth Club in San Francisco.

“We are living in incredibly challenging economic times,” Bodaken wrote in his newspaper piece. “At Blue Shield of California, we believe we have an obligation to tighten our budget, just like everyone else. That’s why we are announcing a new commitment to help our customers get the health care they need at a price they can better afford.”

Bodaken called the company’s “2% pledge” the first of its kind in the country. He said that in addition to the $167 million going back to customers this year, Blue Shield will give another $10 million to doctors and hospitals that coordinate care through so-called accountable care organizations. Another $3 million will go to the Blue Shield of California Foundation to support safety net programs.


Blue Shield CEO Bruce Bodaken earned $4.6 million last year

Health insurers must soon justify 10%-plus premium hikes

-- Duke Helfand