Blue Cross Blue Shield defends bonuses in Michigan
Posted Jun 04 2009 10:41pm
If you live in Michigan, somebody has to insure you and that is Blue Cross, almost like employer insurance if you will as they have to take you as long as you can pay regardless of your health conditions. I believe this is the only state that has a provision like this with a carrier. Now they are still paying out bonuses though and still have some cash to dump into the Blue Cross Venture Capitol fund but laying off 1000 by years end. The CEO made $727,575 in bonuses in 2008 . BD
Despite pay freezes and executive pay cuts in 2009, Blue Cross Blue Shield awarded bonuses to roughly 4,000 nonunionized employees in May for reaching targeted performance goals last year, The Detroit News has learned.
The performance awards come as the state's largest insurer seeks to cut about 1,000 jobs by year's end and hike rates on policies covering more than 400,000 people who buy medical insurance directly from Blue Cross.
The nonprofit insurer has said repeatedly it is losing hundreds of millions of dollars each year on its individual plans -- policies for people not covered by employee benefits -- and needs to make cutbacks to strengthen its financial outlook.
The "broken system" refers to the challenges Blue Cross says it's facing as more newly unemployed Michigan residents flock to its individual plans.
As Michigan's insurer of last resort, Blue Cross must take all residents, regardless of their health, which has allowed for-profit insurers to "cherry-pick" Michigan's healthiest consumers, while leaving the state-regulated insurer with the sickest and costliest members -- a model that's financially unsustainable in the long term, Blue Cross has argued.