Benjamin Franklin once said, “Nothing is certain except death and taxes.” Well, apparently, not true for Blue Cross Blue Shield (BCBS).
According to a new report from STAT News, many BCBS plans get huge tax breaks. They are, in fact, “swimming in refunds.” After reviewing four years of audited financial statements for 32 BCBS insurers, STAT found that 12 insurers failed to pay “any net federal taxes since the calendar flipped to 2018, right after Republicans in Congress and former President Trump overhauled the corporate tax system. The government has refunded more than $6.6 billion, collectively, to those dozen insurers.”
Of note is Health Care Service Corp (HCSC), a BCBS parent company for health insurance plans in Montana, New Mexico, Oklahoma, Texas, and Illinois. Since 2017, HCSC hasn’t paid any federal income taxes, reports STAT News. Rather, HCSC has collected approximately $3.6 billion in federal refunds since 2018 — in addition to garnering profits for being, you know, a corporate business. (To put it into perspective, $3.6 billion would cover the annual premiums of more than 115,000 patients, every year, for the past four years.)
Something that would help us here is little reminder of what, exactly, the BCBS system of health plans brings to society. Theoretically, it’s supporting the health of, and managing costs for, patients.
But that’s not always been the case:
- They’ve denied speech therapy coverage in North Carolina.
- They’ve stifled competition in Minnesota.
- They’ve incorrectly processed claims in Georgia.
Then there was the antitrust suit, where BCBS had to pony up billions of dollars to resolve claims that they were “engaging in a conspiracy to thwart competition among the individual companies.”
And now we’re finding out that good ‘ole Blue isn’t even paying taxes in some of its states.
To be clear – companies like HCSC aren’t breaking the law. But it just so happens these tax laws serve insurance companies like BCBS very well. This, says STAT, is “a natural result of lobbying and designing complex tax rules that have long given the insurers preferential treatment.” Over the next decade, it’s believed that these rules will cost the federal government an average of $400 million.
Which brings us back to our initial question – what on earth is this company doing that deserves a tax break to the tune of $400 million per year? (…Bueller?)
Are BCBS members becoming phenomenally healthier? A quick trip to Mississippi, where the local BCBS product has near domination of the market, would suggest not. Or, perhaps, is the insurance company just full of savvy lobbyists with money to spend?
In any case, we can think of a number of better ways to use those millions. Apparently, BCBS does not.