Are You a Blue Shield Member? Demand a Member Meeting!

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Blue Shield is thumbing its nose at California's top regulator, refusing to delay its horrific 59% premium increases, and its customers (hilariously known as "members"), by saying it will get an outside auditor to check its math but no one is going to tell it what to charge. It's certainly a boost to Insurance Commissioner Dave Jones' effort to put real health insurance rate regulation in place. But it's also a call for action by its own members.

Health finance publisher and blogger Ron Ron Shinkman blogs on Fierce Healthcare that Blue Shield's state nonprofit tax status allows it to hide tax financials and even executive salaries from public view. But the same corporate structure also obligates it, at least on paper, to hold membership meetings, something like annual shareholder meetings.

He's starting a movement to demand just that–you can click on the links below to join him.

Here's how Shinkman describes Blue Shield's scamming of its members:

[Blue Shield's] rate increases are driven partly by the fact that within three years Blue Shield will have to compete with other plans on a state-run exchange. The unspoken fear is if insurers don't lock in staggering rate increases now, they won't be able to do so in a semi-transparent venue like an exchange.

Unlike Blue Cross of California, Blue Shield is a not-for-profit. But Blue Shield is rather cleverly constructed as a California nonprofit mutual benefit corporation, one of the very few health insurers in the state incorporated in this manner. That exempts it from making its tax returns available to the public, or having to disclose the salaries of its top executives.

As Blue Shield explained to me in correspondence last year, "there are many other California nonprofit mutual benefit corporations that are not tax-exempt and do not file a Form 990, including the Automobile Club of Southern California … and any number of homeowners, professional and trade associations."

However, Section 7341 of the California Corporations Code requires such organizations to hold meetings of its membership on its premises. As far as I can tell, Blue Shield has never held one of these meetings. For some reason it is not in the habit of telling its members they have the right to request one.

So, I am going to begin this process. Anyone else who is interested in adding their voice to this request can e-mail me, or do so on a Facebook page I've started for this purpose. If Blue Shield balks at its responsibility to hold a meeting, perhaps a picket or two at its headquarters might change its collective mind.

Blue Shield members, do it now. Show up for a meeting whether the company agrees or not. Dress in rags appropriate to what health insurance premiums are doing to your family budget. Carry a sign telling everyone what it costs you per year. Demand to know CEO Bruce Bodaken's salary. Demand that Blue Shield dip into its bloated $3+-billion surplus to stop the rate hikes. Shame is a powerful tool.

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