|July 22, 2010|
Response to ConsumersUnion Report Questioning BlueCross Reserves
We take our responsibility to members seriously always but especially in uncertain times. Our strong reserves are a big part of this commitment.
The real drivers of premium increases are rising medical costs and utilization not reserves.
We have built our reserves gradually over 65 years.
We view strong reserves as the ultimate consumer protection, providing peace of mind to 3 million members we cover.
ConsumersUnion calls for only the bare minimum of reserves a level regarded as inadequate by most regulators.
The 2008 financial crisis is a very real example of the need for deep reserves. While the value of our reserves dropped significantly, we met all obligations and remained financially strong. No bailouts here.
We dont sell stock reserves are the only source of funds to meet members needs in good times and bad.
Using reserves to lower premiums for one year is short-sighted. Afterward, we would have to raise premiums to catch up with two years of rising medical costs.
Our net income has averaged just 3.6 percent over the last five years and we work hard to keep coverage as affordable as possible.
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