logo
    • Magazine
    • Membership
    • Donate
  • Racial Justice
  • Economic Justice
    • Collections
    • Glossary
  • Climate Justice
  • Health Justice
  • Leadership
  • CONTENT TYPES
  • Subscribe
  • Webinars
    • Upcoming Webinars
    • Complimentary Webinars
    • Premium On-Demand Webinars
  • Membership
  • Submissions

Nonprofit Newswire | Some Nonprofit Health Insurers May be A Bit Too Healthy

Bruce S Trachtenberg
July 23, 2010
Share
Tweet
Share
Email
Print

 

July 22, 2010; Source: Washington Post | Over the course of the economic crisis, we’ve learned that relying too much on leverage and keeping cash cushions dangerously low can be risky, if not downright dangerous. But, according to a new study by Consumers Union, when nonprofit health insurers do the opposite and have more cash in reserve than they really need, they end up charging more for coverage than might be warranted.

In a study of 10 Blue Cross Blue Shield affiliates, the publisher of Consumers Report found that seven of them had surpluses three times the amount regulators say are needed to remain solvent. As a result of keeping cash reserves so high, these insurers have had to raise premiums to cover expenses. Sondra Roberto, a staff attorney at Consumer Reports who co-wrote the report, says when nonprofit health insurers run such large and unnecessary surpluses they “are undermining their mission” of providing affordable health care.

Sign up for our free newsletters

Subscribe to NPQ's newsletters to have our top stories delivered directly to your inbox.

By signing up, you agree to our privacy policy and terms of use, and to receive messages from NPQ and our partners.

Among the larger cash hoarders is Blue Cross Blue Shield of Arizona, which last year had a surplus of $717 billion, more than seven times the minimum regulators require. In 2009, the company also raised premiums between 8.8 percent and 18.4 percent for its individual policyholders. In another instance, Regence Blue Shield of Oregon had about 3.6 times the regulatory minimum, and its rate increases topped 25 percent in April 2009 and 16 percent again last April.

The insurers argue they need so much cash to cover expenses such as accreditation and new technological improvements required by law or to cover unexpected jumps in members’ claims. Roberto suggests that states should require nonprofit plans to report whether any of the cash they are holding is for purposes other than maintaining solvency. That would let regulators decide if they’d be better off using the reserves to offer reduced premiums to consumers.

Regena Frieden, a spokeswoman for Blue Cross Blue Shield Arizona, says—somewhat predictably—”using reserves to buy-down premium increases would only serve as a temporary fix that would not address the underlying problem of rising health-care costs.”—Bruce Trachtenberg

Share
Tweet
Share
Email
Print

Become a member

Support independent journalism and knowledge creation for civil society. Become a member of Nonprofit Quarterly.

Members receive unlimited access to our archived and upcoming digital content. NPQ is the leading journal in the nonprofit sector written by social change experts. Gain access to our exclusive library of online courses led by thought leaders and educators providing contextualized information to help nonprofit practitioners make sense of changing conditions and improve infra-structure in their organizations.

Join Today
logo logo logo logo logo
See comments

summer_sidebar_subscribe
You might also like
Incoherent Policy Threatens Overdose Prevention Sites
Isaiah Thompson
The Promise and Problems of Self-Driving Cars for the Disabled Community
Alison Stine
Thrown In the Deep End
Saphia Suarez
Young People Are Filing Lawsuits—Is This the Future of Climate Action?
Alison Stine
The Pedestrian Safety Crisis in America
Isaiah Thompson
Public Dollars for Public Good
Carmen Rojas

NPQ Webinars

Oct 5th and 6th, 2:00 PM ET

Mastering QuickBooks 2023

Advanced QuickBooks for Nonprofits for Online Users

Register Now
Oct 26th, 2:00 PM ET

Becoming A Great Manager

How to Conspire and Align with the People You Lead

Register Now
You might also like
AOC’s “Tax the Rich” Dress Dazzles Met Gala, while...
Anastasia Reesa Tomkin
Foundation Giving Numbers for 2020 Show 15 Percent Increase
Steve Dubb
Strike MoMA Imagines Art Museums without Billionaires
Tessa Crisman

Like what you see?

Subscribe to the NPQ newsletter to have our top stories delivered directly to your inbox.

See our newsletters

By signing up, you agree to our privacy policy and terms of use, and to receive messages from NPQ and our partners.

Summer 2023 issue

Independent & in your mailbox.

Subscribe today and get a full year of NPQ for just $59.

subscribe
  • About
  • Advertise
  • Careers
  • Contact
  • Copyright
  • Funders
  • Magazine Art

We are using cookies to give you the best experience on our website.

 

Non Profit News | Nonprofit Quarterly
Powered by  GDPR Cookie Compliance
Privacy Overview

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.

Strictly Necessary Cookies

Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings.

If you disable this cookie, we will not be able to save your preferences. This means that every time you visit this website you will need to enable or disable cookies again.