

California tax officials blast Blue Shield in audit - 001sky
http://www.latimes.com/business/la-fi-blue-shield-audit-20150705-story.html#navtype=outfit

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esturk
TLDR: Blue Shield, a non-profit, have been amassing profit to acquire Care1st
which is a for-profit health insurance for 1.2 billion. CA tax auditors check
the books for the last 7 years and claim that Blue Shield willfully kept the
profits from returning to physicians/customers. Now Blue Shield will lose
their tax exempt status.

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bkeroack
Reading a little deeper into the article, they actually are prohibited from
distributing any assets to private persons (shareholders, physicians). Yet
even the CEO claimed otherwise at one point.

As a nonprofit they should have taken their surpluses and used them to offer
low cost health plans or other social benefits. Instead they just hoarded the
cash.

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Gys
"In a scathing audit, state tax officials slammed nonprofit health insurer
Blue Shield of California for stockpiling "extraordinarily high surpluses" —
more than $4 billion — and for failing to offer more affordable coverage or
other public benefits."

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crimsonalucard
Did not even know Blue Shield was non-profit.

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e40
So is Kaiser, which also surprised me.

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ProAm
Did you know Kaiser was the first insurance company/medical group? [1] They
are the root of America's current problems with insuring everyone, although at
the time I don't know if they knew it would come to the mess we have today.

[1]
[https://en.wikipedia.org/wiki/Kaiser_Permanente](https://en.wikipedia.org/wiki/Kaiser_Permanente)

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toast0
Wikipedia says they operate in eight states, so I'm not sure how they're the
root of a problem outside those states.

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ProAm
They were the first insurance company in the US. They started the inflated
insurance practice of policies, group benefits, plans, network rates, etc..
The seed the grew into the national insurance racket we have today.

