It's debatable if the fiduciary standard is 'higher' than suitability. But the better question might be, who's holding the bar?
SANTA MONICA, Calif., Aug. 19, 2014 /PRNewswire-USNewswire/ -- In response to news of Blue Shield's new $2.5 - $8 million luxury skybox at the 49ers' new stadium, Consumer Watchdog sent a letter to California Attorney General Kamala Harris asking for an investigation of "Blue Shield's abuse of its non-profit status" and for immediate steps to "block any additional wasteful spending that robs taxpayers and average California patients of their financial health." November ballot initiative Proposition 45, said Consumer Watchdog, "will stop companies like Blue Shield from increasing premiums to fund lavish entertainment."
"Blue Shield can't raise rates on consumers for a decade and then justify spending millions on luxury boxes and stowing away billions in reserves. Prop 45 will prevent insurers from passing on such extravagances to consumers in November, but until then the Attorney General can crack down on Blue Shield's abuses," said Carmen Balber with Consumer Watchdog Campaign.
Read the letter: http://www.consumerwatchdog.org/resources/ltrbsskybox.pdf
The news of "non-profit" Blue Shield's extravagance comes as a new Field poll finds that 46% of Californians think the state has failed to limit health insurance rate increases, and almost half say they have difficulty paying healthcare costs.
Consumer Watchdog's letter points out that Blue Shield's multi-million dollar expenditure to "wine and dine certain corporate 'membership groups,' is just the latest example of Blue Shield's abuse of its privileged 'non-profit' tax-status at the expense of California taxpayers and patients. The company also has amassed a reserve that is $3.68 billion – or 1667% – more than that required by state law. These unnecessary reserves were funded by years of excessive premium charges to California patients."
Proposition 45 will prohibit excessive profits and require health insurers to get approval for rate hikes. It will allow the insurance commissioner to prohibit health insurance companies from passing on the cost of lavish perks or huge investment returns to consumers. It applies the same rules to health insurance that have saved California drivers over $100 billion since 1988. More than 35 other states regulate health insurance rates, but not California.
Blue Shield's reserve is dwarfed by the $21.7 billion reserve of another so-called "non-profit," Kaiser Permanente, which is 1626% more than is required by the state. Kaiser also announced a 40 percent increase in profits to $2.1 billion for the first half of this year.
For more on Prop 45 visit www.Yeson45.org
Paid for by Consumer Watchdog Campaign – Yes on 45, a coalition of consumer advocates, attorneys, policyholders, and nurses. 777 S. Figueroa St., Ste. 4050, Los Angeles, CA 90017. Major Funding by Consumer Watchdog Campaign and Thomas Steyer.
SOURCE Consumer Watchdog Campaign