Ending an intense controversy, the Pennsylvania Insurance Department has capped the financial surpluses the state's four not-for-profit Blue Cross and Blue Shield plans can hold. A new department rule defines excess surpluses as 3.25 times more than the mandatory minimum surplus required by state law and requires companies holding excess surpluses to submit a plan to "fairly and equitably" redistribute the money to members or the uninsured. Capital Blue Cross, Harrisburg; Highmark, Pittsburgh; Independence Blue Cross, Philadelphia; and Blue Cross of Northeast Pennsylvania, Wilkes-Barre, have been criticized for amassing large surpluses -- some five times larger than the minimum required -- while premiums have climbed and large numbers of state residents remain uninsured. All four insurers face class-action lawsuits seeking to force them to refund some of their surpluses to members. The companies, which have a collective surplus of about $3.5 billion, contend they must maintain a healthy financial cushion so that they are able to cover members' claims in the event of a fiscal or public health emergency. -- by Laura B. Benko
Pa. orders Blues plans to return 'excess' surpluses
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