It’s been hard economic times for most American families the last few years. But it’s a different story for big insurance companies.
The most recent example comes from Health Care Services Corporation (HCSC), which exceeded $1 billion in net income for the second straight year. HCSC is the parent company of Blue Cross Blue Shield plans in Illinois, Texas, Oklahoma, and New Mexico.
As we showed in a report released almost 2 years ago, HCSC has a pattern of hiking annual premiums significantly – some as much as 20% – even as it adds billions of dollars to its already excessive surplus funds:
In Illinois, the company filed for rate increases of 10.2% in 2007, 18% in 2008, and 8.4% in 2009 for some customers… At the time of these increases, HCSC’s surplus grew from $6.1 billion in 2007 to $6.7 billion in 2009, up from $4.3 billion just four years earlier in 2005. The company’s surplus is five times the minimum required for solvency protection.
Thanks to the Affordable Care Act, though, relief is in sight for many of these Blue Cross customers. Due to a new provision called the Medical Loss Ratio, insurance companies must spend 80% of the health care dollars they collect on medical bills. Those that spend excessively on administrative overhead or profits must refund their policyholders.
According to its financial statements, HCSC has set aside over $88 million dollars in rebates for its individual and small-group policyholders due this summer. Even more important, the company’s chief financial officer has acknowledged that the MLR rule is causing HCSC to lower its future rates.
Consumers Union has fought hard to make sure the MLR is fully implemented, and with your help we’ve scored some important victories. Unfortunately, insurance lobbyists are trying to weaken the new provision and take away hundreds of millions of dollars in rebates from millions of health insurance consumers.
Don’t let them! Use our form to send an email now to your member of Congress to stand with Americans struggling with skyrocketing health insurance rates. Together we can hold insurance companies accountable.
