Blue Shield of California has announced that it will reduce, your read that right, reduce premiums by 2.5% for many of its policyholders. The health insurance giant has been under the watchful eye of regulators and Congress for enacting a series of steep rate increases. The adjustment should be reflected in subscribers’ October bill and will amount to about $167 million in savings for its 2 million customers. And as if that wasn’t enough, the company says that it will cap its earnings to no more than 2 percent of annual revenue. Anything Blue Shield makes above and beyond the cap will be refunded to policy holders. The company plans to return $180 million for 2010. Why did Blue Shield decide to lower its premiums and give back money to its subscribers and how much?
Doug Heller, executive director, Consumer Watchdog