Blue Shield to Nonprofits: Drop Dead

I need to get something off my chest.

Last week we received a notice from our health insurance provider, Blue Shield of California, letting us know that our insurance costs were about to almost double. Yes, you heard me right. They are raising our costs by 70%.

The language used to describe this disastrous change would be humorous, if it wasn’t so damned serious.

I want you to know that at Blue Shield we’re committed to providing you with affordable healthcare coverage solutions – ensuring you and your employees continue to have access to quality healthcare coverage.

Unfortunately, a few plans… are receiving a rather high rate increase this renewal period. Rest assured that you can significantly reduce the impact of this rate increase by simply renewing into one of our lower-rate health plans… These new options offer the same popular benefits… but with a higher out-of-pocket cost to your employees and a much more affordable rate for you.

Excuse me?? Maybe executives at Blue Shield of California think it’s fine to screw over their employees. But those of us who don’t prize profits over people find comments like that despicable.

As a small nonprofit organization, we’ve done everything in our power to provide staff with a living wage and benefits. In fact, we make a comparatively significant investment in this, thanks to funders and a board who value our team enough to provide generous benefits.

And now we simply can’t maintain that. Not only is it cost-prohibitive, with our relatively small operating budget, but if we almost doubled the cost of our health benefits, we would raise our administrative "overhead" expenses to a level that would risk donor disapproval. You see, nonprofits are held to a high standard (and rightly so). Foundations and small donors prefer to support program expenses, and have been told time and again to frown upon nonprofits with "overhead" costs that exceed 15 – 20% of the overall budget. Blue Shield of California is a nonprofit, too, but their CEO in all likelihood makes more money each year than our entire annual budget.

I love our staff. These folks work their butts off each and every day for a cause that takes courage and conviction to face, for salaries that simply can’t compete with the for-profit sector. And, yes, we do realize that the PCI staff are fortunate to have jobs–meaningful jobs–and at least some form of health care coverage in these challenging times. We’re grateful for the opportunity to do this work, and be paid fairly.

However, four of our staff are dealing with major healthcare needs. They are now left with a no-win decision: pay more money to maintain their current healthcare coverage, or opt for a cheaper plan with less coverage.

Our story is just one of millions, in California alone. None of this is news. But that doesn’t make it right.

Congress can debate healthcare reform all it wants, but I want our nation’s elected officials to all answer one simple question: How on earth can a health insurance company—or any company for that matter—justify a 70% cost increase?

One thing I can say with relish: My vision of a post-carbon world doesn’t include multi-million dollar salaries for executives who profit by taking away healthcare for their clients. Does yours?


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