WBUR's Sacha Pfeiffer reports on a new study that finds some nonprofit health insurers hoarding millions in extra cash while raising premiums significantly. Among the culprits are Blue Cross Blue Shield of Massachusetts.
Insurers are required to keep surplus cash to cover unexpected losses. But the new report, which looks only at health plans run by Blue Cross Blue Shield, says seven of the 10 plans it analyzed have cash reserves more than triple the minimum amount needed to keep them financially sound.
Blue Cross Blue Shield of Massachusetts is among those seven.
Calling these reserves “enormous surpluses,” the report recommends that insurers spend that extra money on charitable work, refund it to consumers, or use it to set up “rate stabilization funds” that would lower fast-rising premiums.
“Really, when consumers are struggling to afford health care, should nonprofit plans be holding on to all of this money when they might be using it to reduce rate increases?” says Sondra Roberto, a staff attorney for Consumers Union, which did the report.
This program aired on July 22, 2010. The audio for this program is not available.