Proposed individual-policy premium increases have made California a flashpoint in the debate about rising health-insurance costs. Now, in an op-ed published by the San Francisco Chronicle , the chairman and CEO of Blue Shield of California, Bruce Bodaken, says his company will limit profits to 2% of revenue. If at the end of the year net income exceeds that threshold “because medical costs were lower or investment income was higher than we had projected, we’ll return that amount to our members and the community,” he writes. The policy will continue as long as “Blue Shield remains financially solvent, with sufficient funds to make the investments needed to stay competitive.” Blue Shield of California will make payouts this year based on 2010′s profits, which means it will hand back $180 million, mostly to policyholders, Bodaken says. (Providers investing in new ways to coordinate care via ACOs will receive $10 million, and the Blue Shield

of California Foundation will receive $3 million, “to support the safety net.”) Policyholders with individual or family plans (with no financial help from employers) will get a 30% credit on one month’s bill, which Bodaken says amounts to an average of about $80 for individuals and $250 for a family of four. The move by the not-for-profit Blue Shield comes days after the California Assembly passed a bill requiring a state insurance regulator to sign off on proposed premium increases. Currently regulators have the power only to review proposed increases. The bill will now move to the state Senate. When Blue Shield last month disclosed salaries it pays top executives , Bodekan’s $4.6 million paycheck for 2010 — four times greater than the head of a big for-profit insurer in the state — drew criticism. Image: iStockphoto

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Blue Shield of California Says it Will Limit Profits