Experts Say Insurers Unlikely To Emulate Profit Cap Move
Experts say other health insurance companies are not likely follow Blue Shield of California's decision to cap profits at 2% of revenue and allocate excess funds to policyholders, health care providers and other organizations. Peter Kongstvedt -- a managed care consultant -- said because the insurer is a not-for-profit organization, it has more flexibility to limit profits than for-profit companies that have to meet earnings goals. According to Uwe Reinhardt -- a Princeton University health economist -- BlueÂ Shield also posted 3.1% profit margin in 2010, larger than typical margins for not-for-profit insurers.
- "Blue Shield of California Sets Profit Cap Other Insurers May Not Imitate" (Appleby et al., Kaiser Health News/Washington Post, 6/9).
- "California Health Insurer Plans To Cut Rates, Limit Profit, Less Than a Month After Aetna's Rate Reduction" (Sturdevant, "Insurance Capital," Hartford Courant, 6/8).