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FOR IMMEDIATE RELEASE |
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State
Rep. Phyllis Mundy |
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Mundy bill would require Blues to refund excess surpluses
HARRISBURG, Feb. 9 – State Rep. Phyllis Mundy, D-Luzerne, has reintroduced legislation that would require Pennsylvania’s four Blue Cross and Blue Shield plans to return to ratepayers much of their billions of dollars in surpluses.
Mundy said Pennsylvania's four Blues plans amassed a $6.2 billion surplus in 2007, following a 10-year period in which the companies raised premium rates for employer-sponsored insurance plans by more than 134 percent.
Her legislation would provide additional powers to the insurance commissioner and the state Insurance Department to ensure that Blue Cross and Blue Shield companies use a portion of their reserves to reduce ratepayer premiums. Mundy said the companies hold dominant shares of their respective market areas and enjoy state tax exemptions on their premiums.
Under the bill, the Blues would be required to use reserves that exceed minimum levels required by the Insurance Department – and in excess of the amount needed to honor subscriber contracts for an additional three months – to reduce subscribers’ health insurance premium rates.
"My constituents in northeastern Pennsylvania don’t understand why their premiums rise so much faster than overall inflation when, at the same time, the Blues companies report billions of dollars in surpluses," Mundy said.
"This is extremely troubling considering more and more Pennsylvania families and businesses are finding it difficult to afford health insurance," she said. "My bill would put those surpluses back into the hands of ratepayers."
Mundy noted that Blues in other states, including New Jersey and Tennessee, have reduced their excess surpluses and given back to their customers.
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