Blue Shield, Oakland’s newest corporate citizen has announced that its 2017 financial results were boosted by the federal government’s tax reform by $100 million.
Blue Shield of California, which is moving to a new office building in downtown Oakland in next year 2019, posted its financial results last week, showing revenues of $17.7 billion in 2017, compared with revenues of $17.6 billion in 2016. Net income was $290 million in 2017, up from $67 million 2016.
Company spokesman Don Campbell said via email that approximately 85% of the company’s expenditures in 2017 went to pay for health care services. The company has about 4 million plan members across the state.
Campbell said Blue Shield’s net income was boosted by $100 million in tax savings, due to lower rates introduced by the Trump administration late last year.
“The company continues to invest in California communities like Oakland through contributions to the Blue Shield of California Foundation, giving a $35 million contribution to the foundation in January 2018 compared with a $30 million contribution in Feb. 2017,” he said.
In addition, Campbell said the company has begun to include the benefits of its lower taxes in product pricing to help make health insurance costs more affordable. He said it recently announced a $30 million investment in a health care innovation initiative in collaboration with the California Medical Association to support independent physician practices in communities across the state of California. “Like many other U.S. businesses, the company is also passing along some of this benefit to our employees,” he wrote.
Campbell declined to say how the money would be spent on employees or how much.
Blue Shield of California moves to Oakland next year from San Francisco. Blue Shield of California is much smaller than Oakland-based Kaiser Permanente. Kaiser’s next income in 2017 was $3.8 billion, nearly double its 2015 profits.