Blue Shield of California's refund is peanuts compared to its profits #p2 #tcot

As the head of communications for two of the country's largest health insurers for almost 20 years, I recognize an orchestrated spin campaign when I see one. And boy oh boy did I see an award-winning one this week in San Francisco.

The supposedly nonprofit Blue Shield of California went to extraordinary lengths Tuesday to unveil its "bold move to address the health care affordability crisis" by pledging to limit its annual profit to no more than 2 percent of revenue. And not just going forward, mind you, but all the way back to 2010 when the nonprofit's profits were considerably more than 2 percent—so much more that Blue Shield of California says it will refund $180 million to its policyholders.

The company is so proud of its bold move that it arranged for its CEO, Bruce Bodaken, to make the announcement in an op-ed in the San Francisco Chronicle and in a speech the same day at the Commonwealth Club, one of the premier public affairs forums in the country. I know from years of trying to get the Commonwealth Club to even consider CIGNA's CEO as a guest speaker that coordinating Bodaken's appearance at the club on the same day that his op-ed would appear in the Chronicle was quite a PR coup.

While I'm happy for the policyholders who might get a few bucks back from their insurer, the timing of the Blue Shield campaign is, to me at least, a tad suspicious. A few things have been going on in California in recent weeks that undoubtedly have been keeping Bodaken up at night, making me think that this announcement just might be more PR than substance.

Here's the context.

The California Assembly last week passed a bill that Bodaken's company and the state's other health insurers have been lobbying hard to kill. The bill, which is now on its way to the Senate, would give the state's insurance commissioner the authority to reject "unreasonable" premium increases.

Commissioners in more than half the states now have that authority, and some have recently been denying rate increases they felt were unjustified.

Although California is not yet one of those states, rate regulation is not a novel concept in California. Home and auto insurers must get permission from state regulators before increasing premiums. Since the state's voters approved a ballot initiative in 1988 requiring auto insurers to get prior rate approval from regulators, California drivers have saved more than $62 billion, according to Consumer Watchdog and the Consumer Federation of America.

rest at http://www.iwatchnews.org/2011/05/31/4848/analysis-blue-shield-californias-refund-peanuts-compared-its-profits