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June 07, 2011 at 08:00 PM
Blue Shield of California, a nonprofit health insurer, says it will try to limit its annual net income to 2% of revenue.
California Blue Shield, San Francisco, will make that move retroactive to 2010, meaning that the company could send about $180 million to the company’s customers and to California communities, according to California Blue Shield Chairman Bruce Bodaken.
California Blue Shield will give $167 million to fully insured individual and group 
customers and $3 million in the form of grants to nonprofit health care organizations.
California Blue Shield also will invest $10 million in California hospitals and physician groups, the company says.
The average individual customer will get a credit of about $80, and the average small group will get about $125 for one employee and about $340 for a family of four, the company says.
Bodaken spoke as activists in many states are using large health insurers’ healthy margins as a reason to oppose changes in efforts to implement the Patient Protection and Affordable Care Act of 2010 (PPACA).
A PPACA minimum medical loss ratio (MLR) requires carriers to spend 85% of large group revenue and 80% of individual and small group revenue on health care or quality improvement efforts.
Another PPACA provision will require regulators to review any efforts to increase health coverage rates more than 10%.
California Blue Shield has been a strong supporter of efforts to expand access to health coverage and to make PPACA worth, rather than efforts to block implementation of the legislation.
