The potential sale of Blue Cross and Blue Shield of Louisiana is sparking fears across the state of future price increases
Baton Rouge Business Report, David Jacobs, October 10, 2023
Michael Johnson was an executive with Blue Shield of California for 12 years. At one point, he says, he realized the company was evading its duties as a nonprofit, but the CEO dismissed his concerns, so he resigned and began speaking out publicly.
Johnson is now a self-styled advocate for nonprofit accountability, and the pending sale of the currently nonprofit Blue Cross and Blue Shield of Louisiana to for-profit Elevance Health raises alarm bells for him. His objections played a prominent role in a recent legislative hearing on the subject and helped fuel public pushback to the deal.
Blue Cross plans for $3.2B foundation to face scrutiny in regulatory hearings
Times-Picayune, Stephanie Riegel, September 25, 2023
When Blue Cross and Blue Shield of Louisiana officials announced earlier this year they had agreed to be acquired by Elevance Health, the state’s philanthropic community cheered a plan to create a $3.2 billion foundation with the bulk of the proceeds. …
Some policyholders, who must vote to approve the sale, along with public policy advocates, are questioning how the money will be divided between the foundation and policyholders, who will also receive a share of proceeds from the transaction.
They’ve also raised questions about who will control the foundation once it is established and how it will be organized. …
Under the terms of the deal, seven Blue Cross board members will continue to serve on an advisory board to Elevance leadership, where they will be paid $105,000 a year for at least a decade, or about $1 million each.
Barfield and the three foundation board members will not be paid.
“The existence of this arrangement calls into question whether BCBSLA’s directors can be trusted to put the interests of BCBSLA’s intended beneficiaries ahead of their own,” said Michael Johnson, a former Blue Shield of California whistleblower who now runs a website dedicated to transparency in health care. …
Other questions have centered on the fact that the board chose to establish the foundation as a 501(c)(4) nonprofit, a type of partially tax-exempt organization that has greater latitude to engage in political activity than does a strictly tax-exempt 501(c)(3) nonprofit.
Jan Moller, executive director of the Louisiana Budget Project, a left-leaning public policy organization, said the foundation could lobby or contribute to political candidates to affect health care or insurance policy. …
Moller and Johnson also criticized the make up of the founding board and its lack of diversity in a state where nearly 50% of the population is Black or Brown and 20% lives at or below the federal poverty level.
“All of the directors are white men, who collectively do not reflect Louisiana’s diverse population,” Moeller wrote in a letter of opposition to the Department of Insurance.
As Blue Shield steps back from controversial vaccine role, critics question results
Los Angeles Times, Melody Gutierrez, August 18, 2021
The company’s reduced role announced last month closes a controversial chapter in the state’s ongoing efforts to combat COVID-19, one that began with questions about the Newsom administration’s handling of who should be first in line when supplies were limited and culminated in the governor’s surprising decision to put the insurance giant, a longtime political donor, in charge.
Blue Shield Spent Years Cultivating a Relationship with Newsom. It Got the State Vaccine Contract
Kaiser Health News, Samantha Young and Angela Hart, March 19, 2021
Gavin Newsom was just making a name for himself as mayor of San Francisco in 2005 when Blue Shield of California wrote him its first major check.
Head-Scratching Over Newsom’s Choice of Blue Shield to Lead Vaccination Push
Kaiser Health News, Bernard J. Wolfson, February 1, 2021
Gov. Gavin Newsom’s surprising choice of Blue Shield to lead the state’s covid vaccination effort raised questions about the role politics played in the decision — and whether the insurer is up to the task.
Lawsuit challenges state ruling over charitable assets of nonprofit health providers
San Diego Union Tribune, Jeff McDonald, February 16, 2020
Johnson, whose lawsuit seeks to compel the agency to release all the emails and other records he requested, said regulators are deliberately obscuring their reasoning from the public.
Nonprofit Delta Dental of California Under Fire for 'Flagrant' Spending
Daily Beast, Anna Maria Barry-Jester, January 28, 2019
Nonprofit Delta Dental is under fire by consumer advocates for its $14.3 million CEO pay, trips to Barbados for board, staff and spouses, and disregard for its public benefit duty.
Did Blue Shield Of California Short-Change Consumers On Refunds?
Kaiser Health News, Pauline Bartolone, July 18, 2016
A class-action lawsuit filed earlier this month claims that Blue Shield of California stiffed consumers on more than $34 million dollars in refunds on premiums they paid in 2014.
Blue Shield faces new criticism of shortchanging consumers in California
Los Angeles Times, Noam Levey, June 28, 2016
Blue Shield of California, already under scrutiny by state officials, is facing new criticism that it didn’t adequately pay back policy holders for excessively spending on administrative costs in 2014. Officials from the health insurer strongly rejected the allegation, made by a former company executive in a complaint to state regulators.
Blue Shield ‘Lifts The Veil’ On Executive Pay
Kaiser Health News, Chad Terhune, May 26, 2016
In its first detailed disclosure on executive pay, nonprofit Blue Shield of California said Chief Executive Paul Markovich made $3.5 million last year – a 40 percent increase since he took the top job in 2013.
Blue Shield of California files suit against whistleblower
Healthcare Dive, Heather Caspi, November 11, 2015
Nonprofit insurer Blue Shield of California is going after its former public policy director, Michael Johnson, who left the company eight months ago and has since been a vocal critic of the insurer.
Blue Shield of California Sues Its Most Prominent Critic—A Former Senior Exec
Nonprofit Quarterly, Rick Cohen, November 10, 2015
Johnson told Nonprofit Quarterly that “this is a classic SLAPP suit.” (SLAPP stands for “strategic lawsuit against public participation” and refers to a suit intended to silence critics or opponents by hitting them with expensive litigation that would cause them to cease their criticism.) He said, “There’s no doubt at all that this is about threatening to bury me in legal costs and get me to back down.”
Nonprofit insurer Blue Shield sues former executive who became company critic
Los Angeles Times, November 9, 2015
Health insurance giant Blue Shield of California sued its former public policy director and accused him of disclosing confidential company information.
Blue Shield may be heading to showdown with regulators over executive pay
Los Angeles Times, Chad Terhune, October 22, 2015
In response to mounting criticism, Blue Shield of California's chief executive is vowing to improve the nonprofit insurer's poor ratings from patients and to disclose more about executive compensation. But CEO Paul Markovich warned that certain details on executive pay will remain secret, portending a potential showdown with regulators.
Blue Shield's deal with regulators on $1.2-billion acquisition draws fire
Los Angeles Times, Chad Terhune, October 8, 2015
Beleaguered insurer Blue Shield of California won state approval for its $1.2-billion acquisition of a Medicaid health plan, but the nonprofit company's deal with regulators drew heavy criticism.
Questions about Leon Panetta, Blue Shield of California, & The Nonprofit Sector
Nonprofit Quarterly, Rick Cohen, September 16, 2015
Some of the very important side benefits from Michael Johnson’s ongoing scrutiny of Blue Shield of California’s efforts to get back its tax exempt status are the lessons for nonprofits overall.
Blue Shield's proposed acquisition of Care1st faces tough scrutiny
Los Angeles Times, Chad Terhune, June 8, 2015
A top California regulator vowed a "deep dive" into a $1.2-billion acquisition proposed by Blue Shield of California amid criticism that the nonprofit insurer is shortchanging the public. Shelley Rouillard, director of the state Department of Managed Health Care, signaled tough scrutiny ahead for Blue Shield's proposed purchase of Medicaid insurer Care1st Health Plan at a hearing she held Monday at the request of several consumer groups.
Blue Shield faces more heat over nonprofit status, $1.2-billion deal
Los Angeles Times, Chad Terhune, June 5, 2015
Health insurance giant Blue Shield of California is facing more questions over its loss of tax-exempt status as it tries to win state approval of a $1.2-billion acquisition. A former Blue Shield executive is accusing the San Francisco insurer of giving contradictory answers to state officials about its corporate structure.
Will Blue Shield of California eventually convert to for-profit?
Healthcare Dive, Heather Caspi, May 13, 2015
Efforts by consumer advocates to put Blue Shield of California in the spotlight have been making headlines since the healthcare giant lost its tax-exempt status in March, and following their success in calling for a public hearing over BSCA's proposed $1.25 billion acquisition of Care1st, the pressure appears to be mounting. The voice behind this pressure is former BSCA Director of Public Policy Michael Johnson.
Thanks to whistleblower, Blue Shield's $1.25 billion California acquisition under review
San Francisco Business Times, Chris Rauber, May 7, 2015
The state Department of Managed Health Care is reviewing Blue Shield of California's $1.25 billion bid to acquire Medi-Cal specialist Care1st, after complaints from whistleblower Michael Johnson, a former Blue Shield executive, and several consumer groups. A hearing on the deal is scheduled for early June.
Blue Shield's $1.25-billion deal for Care1st faces more state scrutiny
Los Angeles Times, Chad Terhune, May 7, 2015
State regulators will hold a hearing next month on Blue Shield of California's proposed acquisition of Medicaid insurer Care1st for $1.25 billion.The California Department of Managed Health Care said both companies will explain their rationale for the deal at the June 8 hearing in Sacramento. The public will also have a chance to chime in.
It's time to make Blue Shield of California a for-profit insurer
FierceHealthPayer, Brian Eastwood, May 4, 2015
The year 2015 has not been kind to the Golden State's third-largest insurer. In March, Blue Shield of California lost its tax exempt status, then faced scrutiny for a $1.2 billion acquisition, the cost of which it only revealed after public pressure. All this while a former executive campaigns to turn the nonprofit insurer into a for-profit company.
The NCRP Impact Awards: Questions about the Blue Shield of California Foundation
Nonprofit Quarterly, Rick Cohen – April 7, 2015
One of the winners, though, the Blue Shield of California Foundation, has a somewhat troubling aspect—and it’s not the foundation’s philanthropy. It’s the parent organization, Blue Shield of California.
Your Call with Rose Aguilar (audio)
KALW – April 2, 2015
How do non-profit health insurance companies like Blue Shield operate? On the April 2nd edition of Your Call, we’ll have a conversation with Michael Johnson, a former Blue Shield policy director who says the company is no different than its for-profit competitors. He recently resigned over high premiums, multi-million dollar salaries, and billions in profits. The state recently stripped Blue Shield of its tax-exempt status. Johnson says Blue Shield should give back the profits it made while it received tax breaks.
Blue Shield of California is under new pressure to lower rates
Los Angeles Times, Chad Terhune – March 27, 2015
With billions of dollars in reserve, nonprofit insurer Blue Shield of California is facing new pressure to offer better prices for its policies. Despite its nonprofit status, the health insurance giant is usually on par or priced slightly above its for- profit rivals, according to a review of rates and interviews with insurance agents and industry officials.
A Radical Proposal to Convert the Assets of Blue Shield of California
Nonprofit Quarterly, Ruth McCambridge – March 24, 2015
Michael Johnson, quoted in Rick Cohen’s newswire of last week talking about some of the same issues, is the former Director of Public Policy at Blue Shield of California. As readers may remember, Blue Shield recently had its state tax exemption revoked because it was acting more like a for-profit than a nonprofit. Now, Johnson has written in a blog at healthinsurance.org about his own resignation from that organization two weeks ago.
Blue Shield seeks to avoid disclosing its price for Care1st
Los Angeles Times, Chad Terhune, March 20, 2015
Nonprofit insurer Blue Shield of California, already under scrutiny for its huge cash reserves and lack of disclosure, is refusing to say how much it's spending to acquire a Monterey Park insurance company and is seeking confidentiality from state regulators.
Blue Shield Of California Loses Its Tax-Exempt Status (audio)
NPR Morning Edition, Richard Gonzales -- March 19, 2015
One of California's largest health insurers, Blue Shield of California, could be on the hook for a massive tax bill after the state revoked its tax-exempt status. The company is appealing the decision which could cost the health insurer tens of millions of dollars a year. The dispute comes as the nonprofit is facing mounting criticism for operating like a for-profit company.
CA Pulls Tax-Exempt Status of Blue Shield of California
Nonprofit Quarterly, Rick Cohen – March 19, 2015
This is a story of major significance to nonprofits and to healthcare. The California Franchise Tax Board pulled the tax exemption of Blue Shield of California last August, but the news is just being reported now. The decision on Blue Shield’s tax status follows the resignation of its longtime public policy director, Michael Johnson, who charged that Blue Shield had been “shortchanging” its California customers and behaving like its for-profit competition.
Blue Shield Of California Loses Its Tax-Exempt Status
NPR, Richard Gonzales — March 19, 2015
One of California's largest health insurers, Blue Shield of California, could be on the hook for a massive tax bill after the state revoked its tax-exempt status. The company is appealing the decision which could cost the health insurer tens of millions of dollars a year. The dispute comes as the nonprofit is facing mounting criticism for operating like a for-profit company.
Why did it take 7 months to learn Blue Shield lost tax-exempt status?
Los Angeles Times, Chad Terhune -- March 18, 2015
Health insurance giant Blue Shield of California and state tax authorities both came under fire for not disclosing seven months ago a landmark decision taking away the insurer's tax-exempt status, which had been in place since 1939.
Blue Shield of California Loses Its State Tax Exemption
Kaiser Health News, Jenny Gold – March 18, 2015
California tax authorities have stripped Blue Shield of California, the state’s third largest insurer, of its state tax exemption and ordered the company to file returns dating to 2013, potentially costing the company tens of millions of dollars. At issue in the unusual case is whether the company is doing anything different from its for-profit competitors to warrant its tax break. As a nonprofit company, Blue Shield is expected to work for the public good in exchange for the state tax exemption.
Blue Shield's lost tax exemption shines spotlight on not-for-profits
Modern Healthcare, Bob Herman – March 18, 2015
A recent revocation of Blue Shield of California's not-for-profit tax status raises questions of whether insurers and not-for-profit providers are doing enough to keep irate taxing bodies from following California's lead.
With billions in the bank, Blue Shield of California loses its state tax-exempt status
Los Angeles Times, Chad Terhune – March 18, 2015
Authorities have revoked the tax-exempt status of nonprofit Blue Shield of California, potentially putting it on the hook for tens of millions of dollars in state taxes each year. The move by the California Franchise Tax Board comes as the state's third-largest health insurer faces fresh criticism over its rate hikes, executive pay and $4.2 billion in financial reserves. Michael Johnson, who resigned as public policy director last week after 12 years at the company, said the insurer has been "shortchanging the public" for years by shirking its responsibility to Californians and operating too much like its for-profit competitors.