Blue Shield of California: Down But Not Out
Health care reform protest at Blue Shield of California. Photo by Steve Rhodes/Flickr.
Quietly, in August 2014, one of the largest health insurance companies lost their tax exempt status in the State of California: Blue Shield of California. Established in 1938, it’s been well known for years that this company and its real owner, California Physicians’ Service, Inc. (CPS), quietly scooped up billions in tax exempt revenue. They also managed to confound the government even further by calling themselves a Foundation!
Santa Fe, New Mexico, 4 June 2015
By Dr. James Goldberg, Author of The American Medical Money Machine: The Destruction of Healthcare in America and the Rise of Medical Tourism
The King is Dead: Long Live the King
The California State Franchise Tax Board is known to be ruthless in hunting down fraud. Finally, after decades of deceit, Blue Shield’s tax evasion scam got the axe. But that isn’t stopping Blue Shield, the almighty, from appealing the decision. Should they lose, they are prepared to fall back to continuing as a not-for-profit organization. Watch for another Ivy League accounting move to shelter their billions of stored money, money which they have amassed on top of paying their chief executives billions in compensation while dominating the California medical insurance cartel.
Sean Barry, a Blue Shield spokesperson, said the company would remain a not-for-profit even if it doesn’t prevail in its effort to win back its tax-exempt status.
What confidence! Blue Shield currently has at least $4.2 billion in financial reserves as of the end of 2014 and has held at least $3 billion in reserve each year since 2009. But they’ve contributed only a fraction of that to its Foundation and paid even less over the years in fines and penalties for sanctions levied against them. It’s always fight, lose and yet still win. Here’s the latest installment in Blue Shield’s storied history.
Blue Shield loses tax-exempt status in California
Published: Mar 18, 2015 4:17 p.m. ET
LOS ANGELES (MarketWatch)—Regulatory officials in California have revoked the tax-exempt status of one of the state’s largest health insurers, Blue Shield of California, exposing the nonprofit entity to millions of dollars in annual tariffs, back taxes, sanctions etc.
The Franchise Tax Board confirmed Wednesday that Blue Shield, operating under the name California Physicians Service, actually lost its tax-exempt status on Aug. 28. But the revocation didn’t become public until the Los Angeles Times reported the move early Wednesday.
