Report Finds Excellus and Others May Hold Too Much $$ in Reserve

http://www.syracuse.com/ reported that while raising customer rates, Excellus BlueCross BlueShield may be setting aside more money than necessary to protect against potential financial losses, according to a report released today by Consumers Union.

The report said state insurance commissioners looking to curb rate increases should scrutinize the amount of surplus money amassed by nonprofit BlueCross BlueShield plans like Excellus.

Surplus is the excess of an insurance company’s assets over liabilities, which insurers set aside to protect the company and its members from financial losses. Excellus had $965.1 million in surplus at the end of 2009. Its surplus fund grew as high as $1.18 billion in 2007.

The report by Consumers Union, publisher of Consumer Reports magazine, looked at 10 BlueCross BlueShield plans nationwide and found seven of them held more than three times the amount of minimum surplus recommended by the National Association of Insurance Commissioners.

“Consumers are struggling to afford health insurance and BlueCross BlueShield plans have been amassing a lot of surplus over the last 10 years as rates have gone up,” said Lauren Sobel, senior attorney with Consumers Union. “The two should be considered together.” Read more here.