Blue Cross: Insurer raises rates 82%, pays executives multi-million-dollar bonuses

Non-Profit Insurer Paid $56.7 Million to 10 Executives…

We now know why patients are paying sky-rocketing insurance premiums: to pay out multi-million-dollar bonuses to executives of non-profit insurance companies.

An investigation by reveals that the Blue Cross and Blue Shield insurer in five states gave its top executives 57 percent pay raises last year — while raising rates and claiming big losses.

Health Care Service Corp., the Blue Cross non-profit organization that provides insurance in Texas, Illinois, Oklahoma, Montana and New Mexico, paid just 10 executives a total of $56.7 million in 2015.

“That total was 57% higher than the $36.1 million that the same 10 executives earned in 2014,” reports

In total, these non-profit insurance executives made $48 million in bonuses, while their organization lost money.

… As It Raised Rates by as Much as 82 Percent

As the company paid out millions of dollars to top executives, it raised rates and slashed coverage options for hundreds of thousands of patients.

The Houston Chronicle notes the impact felt by patients in Texas.

“When 2016 arrived, Blue Cross and Blue Shield of Texas, HCSC’s second-largest division, raised rates 20 percent and eliminated 367,000 plans, including 88,000 in Houston, that gave in-network access to many of the state’s top-tier hospitals and specialists. The company said the benefit had become ‘unsustainable.'”

That was at the start of this year. In 2017, Texans will pay a 60 percent increase on top of the this year’s increases.

In other states, patients with insurance from Health Care Service Corp. will see their insurance premiums go up by as much as 82 percent in 2017, including:

  • 82 percent increase in New Mexico
  • 76 percent increase in Oklahoma
  • 45 percent increase in Illnois
  • 58 percent increase in Montana

Health Care Service Corp. CEO: $16.57 million salary

Just one executive earned $16.6 million last year, including a $15 million bonus.

CEO Patricia Hemingway Hall received a 42% increase from her $11.7 million pay package in 2014, according to’s investigation. Since 2011, she has earned — as the leader of a non-profit organization — more than $68.3 million.

And this high pay came as non-profit Blue Cros Blue Shield insurers lost hundreds of millions of dollars. Back in June, when Blue Cross Blue Shield of Texas pleaded for its 60 percent premium hike, it cited losses as the basis for its rate hikes.

“It’s also important to understand the magnitude of the losses … experienced in the individual retail market over the past two years,” Blue Cross Blue Shield of Texas said in a statement.

Myth Busting: High Pay Doesn’t Retain Top Talent

Greg Thompson, a spokesman for Health Care Service Corp, defended the high salary and multi-million dollar bonuses by repeating a common myth.

“Compensation needs to recruit and retain top talent who can manage the complexities of this business and advocate for a healthcare system that works for our policyholders not just today, but for years to come,” the company said in a statement.

There’s just one problem with that excuse: Patricia Hemingway Hall retired as CEO the very next year after collecting her $14.9 million bonus.

She wasn’t alone.

Ken Avner, HCSC’s former chief financial officer, retired one year after getting a 29 percent pay raise that brought his annual compensation up to $4.7 million.

So much for retaining top talent.

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