California tax officials blast Blue Shield in audit(latimes.com)
latimes.com
California tax officials blast Blue Shield in audit
http://www.latimes.com/business/la-fi-blue-shield-audit-20150705-story.html#navtype=outfit
3 comments
TLDR: Blue Shield, a non-profit, have been amassing profit to acquire Care1st which is a for-profit health insurance for 1.2 billion. CA tax auditors check the books for the last 7 years and claim that Blue Shield willfully kept the profits from returning to physicians/customers. Now Blue Shield will lose their tax exempt status.
Reading a little deeper into the article, they actually are prohibited from distributing any assets to private persons (shareholders, physicians). Yet even the CEO claimed otherwise at one point.
As a nonprofit they should have taken their surpluses and used them to offer low cost health plans or other social benefits. Instead they just hoarded the cash.
As a nonprofit they should have taken their surpluses and used them to offer low cost health plans or other social benefits. Instead they just hoarded the cash.
More specifically, they will lose their CA non profit exemption status. They already have been paying federal taxes as a for profit.
"In a scathing audit, state tax officials slammed nonprofit health insurer Blue Shield of California for stockpiling "extraordinarily high surpluses" — more than $4 billion — and for failing to offer more affordable coverage or other public benefits."
Did not even know Blue Shield was non-profit.
So is Kaiser, which also surprised me.
They just plow any "profits" into inflated salaries for their executives and management.
Did you know Kaiser was the first insurance company/medical group? [1] They are the root of America's current problems with insuring everyone, although at the time I don't know if they knew it would come to the mess we have today.
[1] https://en.wikipedia.org/wiki/Kaiser_Permanente
[1] https://en.wikipedia.org/wiki/Kaiser_Permanente
Wikipedia says they operate in eight states, so I'm not sure how they're the root of a problem outside those states.
They were the first insurance company in the US. They started the inflated insurance practice of policies, group benefits, plans, network rates, etc.. The seed the grew into the national insurance racket we have today.