Blue Shield Plans To Cap Earnings Amid Sharp Criticism
LOS ANGELES (KNX1070) — Blue Shield of California came under sharp criticism last month when it revealed that its CEO, Bruce Bodaken, earns four times that of an average non-profit California insurer.
KNX 1070's Brian Ping reports that the company says it'll cap its earnings at two percent of revenue, with the balance returned to customers and care providers.
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"While I appreciate the company's decision to return some of that money, I think many Californians would ask why isn't it all being returned – particularly when they have $3.5 billion in reserves," State Insurance Commissioner Dave Jones said.
The cap will amount to a $167 million dollar reimbursement, most of which will go to those who hold non-employer policies.
Senators are taking up a bill just passed by the Assembly that would require a state regulator to sign off on proposed premium increases.
