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Blue Shield of California Pledges to Cap Profits

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(Sacramento, CA)
Tuesday, June 7, 2011

The company is applying the profit cap retroactively, and will return some money earned in 2010.

Blue Shield health insurance holders in California will see a one-time credit of up to 30% in their premium bill this October. 

The company is returning $167 million to policyholders, and donating another $13 million to health organizations.

Paul Markovich of Blue Shield of California says he hopes it's a relief to customers.

MARKOVICH:And we hope to prompt a conversation with lots of others in the industry about what could be done to solve this affordability crisis.

But California Insurance Commissioner Dave Jones says the move is proof that stronger health insurance regulation is needed in California.

JONES:  It's an admission that a non-profit has been making excessive profits and therefore needs to return some of it to its policy holders.

Jones adds the compnay saw a doubling of its profits from 2009 to 2010, and has a reserve of 3.5 billion dollars.

Blue Shield says their pledge is indefinite - as long as their board determines they're financially solvent.

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