With billions in the bank, Blue Shield of California loses its state tax-exempt status

[eridani]

Score another one for CA!

http://www.latimes.com/business/la-fi-blue-shield-california-20150318-story.html

Authorities have revoked the tax-exempt status of nonprofit Blue Shield of California, potentially putting it on the hook for tens of millions of dollars in state taxes each year.

The move by the California Franchise Tax Board comes as the state's third-largest health insurer faces fresh criticism over its rate hikes, executive pay and $4.2 billion in financial reserves.

The highly unusual action comes after a lengthy state audit that looked at the justification for Blue Shield's taxpayer subsidy.

Now, a company insider has sided with critics. Michael Johnson, who resigned as public policy director last week after 12 years at the company, said the insurer has been "shortchanging the public" for years by shirking its responsibility to Californians and operating too much like its for-profit competitors.

Comment by Don McCanne of PNHP: Many of us in California were very upset when Blue Cross of California converted to a for-profit (WellPoint, then Anthem) and immediately changed its behavior to fulfill its responsibilities to its shareholders as a profit-making business. We immediately saw “insurance innovations” that redirected its business goals from taking care of patients to taking care of shareholders.

It was particularly disappointing to see non-profit Blue Shield of California adopt similar insurance innovations in order to remain competitive in the California insurance market. From the perspective of health care “consumers,” Blue Shield and Blue Cross remained virtually indistinguishable.

Blue Shield of California has annihilated the dream of those who believed that the United States could adopt a universal system of private, non-profit insurance companies like they have in Switzerland. There are many serious problems with the Swiss model, but some believed that a market of well-regulated, non-profit insurers would make optimal patient care a priority. Blue Shield of California has now demonstrated to us that this pipe dream would only become another nightmare in the saga of private insurance markets in the U.S.

[patricia92243]

1. An insurance company as a non-profit?? I didn't know that - does it apply to other

insurance companies?

[Sedona]

2. GOOD!

Maybe we'll be getting that premium refund even quicker this year.

https://www.whitehouse.gov/blog/2013/07/18/refund-your-health-insurance-company-thank-affordable-care-act

[fasttense]

3. Capitalism just has a way of destroying most everything

It destroys democracy, relationships and entire cities. The US has become a holy shrine to the failure of capitalism. Any attempts to escape will be harshly punished.

Capitalism will destroy the US before it will release the country from its cold bloody claws.