Rates rise, health insurance execs bank big bucks
Top executives at health insurance companies banked large salaries in recent years while rates rose dramatically on individual policyholders in California, according to filings with the state insurance commissioner last month.
In documents posted to the state's website, Blue Shield of California reported that its chief executive officer, Bruce Bokaden, was paid more than $4.6 million in 2010. The San Francisco-based insurer raised rates on some policyholders by about 38 percent over 2010 and 2011.
The salaries are not outside the norm and are based, in part, on a performance-based bonus plan that rewards executives for meeting goals, Blue Shield spokesman Steve Shivinsky said in a statement Wednesday.
"We offer a competitive compensation package to attract and retain top-quality executives necessary to maintain a high level of performance and service," Shivinsky said.
Shivinsky pointed out that Blue Shield is a not-for-profit insurer that doesn't offer stock options to executives like for-profit companies do.
The state's largest for-profit insurer, Anthem Blue Cross, also paid executives ample salaries, according to documents provided to The Associated Press on Wednesday.
At the top of the heap, Treasurer R. David Kretschmer earned nearly $2.4 million in 2010, up from about $572,000 in 2008. Pamela Kehaly, president of Anthem's California operations, banked about $524,000 in 2010.
An spokeswoman for Anthem, a unit of WellPoint Inc., said she could not immediately comment or provide more details Wednesday.
Anthem's attempted rate increase last year, which would have cost some policyholders 39 percent more in premiums, became President Barack Obama's poster child for out-of-control health care costs in his push to pass federal health care reform.
The rate was dropped under pressure from state and federal regulators to an average of 14 percent for policyholders.
The compensation documents are part of the new requirements for rate increase filings under a rate review law that went into effect this year, according to Department of Insurance spokesman Ioannis Kazanis.
In a legislative hearing last month, Insurance Commissioner Dave Jones said the top five insurers in California collectively banked more than $11 billion in profits in the last year alone.