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Kaiser, Blue Shield go to court to fight $10 billion in state back taxes




Kaiser and Blue Shield are being sued by Consumer Watchdog and others for allegedly dodging a state tax on health insurance premiums.
Kaiser and Blue Shield are being sued by Consumer Watchdog and others for allegedly dodging a state tax on health insurance premiums.
Ted Eytan/Flickr

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A court hearing in Los Angeles today against two of California’s biggest health insurance providers could bring billions of dollars to the state coffer.

Kaiser and Blue Shield are being sued by Consumer Watchdog and others for allegedly dodging a state tax on health insurance premiums. The suit wants the two companies to start paying the tax, plus about $10 billion in state back taxes.

Kaiser and Blue Shield say that they should not be taxed because they are not technically insurers. And if they end up being on the hook for a huge tax bill, they might have to raise premiums on consumers.

Besides Kaiser and Blue Shield, Anthem Blue Cross and Health Net are also facing a similar lawsuit.

The four insurance providers make up 70 percent of California’s health insurance market.   

Guests:

Jamie Court, president of Consumer Watchdog, the organization that’s bringing the lawsuit against Kaiser Permanente, Blue Shield of California, Anthem Blue Cross, and Health Net

Charles Bacchi, President and CEO of California Association of Health Plans, which represents all the managed health plans in California