Regarding the Aug. 7 news article “Blue Cross seeks 34.6% rate hike in N.C. for ACA plans”: The announcement by Blue Cross and Blue Shield caused me to focus on the truly charmed life this organization has enjoyed in North Carolina since its inception.
It is organized as a nonprofit with the top five executives having an aggregate compensation exceeding $8 million and a historical market monopoly in the North Carolina health insurance market.
As a nonprofit, it does not generate retained earnings but rather is charged with creating a surplus to protect the company against extraordinary losses.
However, as recently as 2010, the Consumers Union conducted a national survey on nonprofit Blue Cross plans across the United States and determined at that time North Carolina had a surplus 4.5 times the recommended regulatory minimum.
Insurance companies generate revenue by raising premiums, denying claims and underwriting out what they perceive as inordinate risks. The ACA precludes them from denying policies to many people they would have excluded in the past.
One wonders how much surplus Blue Cross built up prior to the ACA when it cherry-picked its risks and imposed dollar and term limitations on their policies. It is time for transparency.
James E. Maynard Jr.