Health Plans Offering Top Dollar to Executives While Hiking Rates
In recent years, California health insurance companies have paid large salaries to their top executives while raising rates significantly for policyholders, according to filings submitted to the state insurance commissioner, the AP/San Francisco Chronicle reports.
Ioannis Kazanis, spokesperson for the Department of Insurance, said insurers filed the compensation data last month to comply with requirements that took effect this year.
In the filings, Blue Shield of California reported that its CEO Bruce Bodaken received more than $4.6 million in pay in 2010. During 2010 and 2011, the health plan raised rates by about 38% for some policyholders.
Anthem Blue Cross' top-earning executive, Treasurer R. David Kretschmer, received nearly $2.4 million last year. Pamela Kehaly, president of Anthem's California operations, received about $524,000 in 2010. The same year, Anthem sought to raise rates by 39% for some policyholders but eventually scaled down its plans to a 14% rate hike (Mohajer, AP/San Francisco Chronicle, 5/25).
Response From Advocates, State
Jamie Court, president of the advocacy group Consumer Watchdog, said Bodaken's pay was an "out-of-proportion salary for a not-for-profit company."
According to the state insurance department, the public availability of insurers' salary data will benefit policyholders.
Janice Rocco, deputy insurance commissioner, said many consumers "would like to have a full picture of what insurers are spending their money on."
Health Plans' Stance
Blue Shield defended the salaries of its top executives. The company said the salariesÂ fall "well within health care industry standards," were based on performance and were reviewed by an independent consultant.
The not-for-profit health plan also said its executives do not receive company stock like executives at for-profit companies. Executives at Anthem Blue Cross do receive stock awards (Helfand, Los Angeles Times, 5/26).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.