The company put much of the profit in reserves. But its customers will not benefit through lower premiums, many complaining they are not sharing in that success.
So, the state's insurance department wants to know what's going on.
2003 was a watershed year for
Blue Cross Blue Shield of North Carolina.
After cutting short its bid to convert to a for-profit company, it turned a record profit -- an enormous jump from a healthy $76 million the year before.
"It was an exceptional year," BCBSNC spokesman Mark Stinneford said. "It was a year we don't believe will be repeated."
CEO Bob Greczyn was rewarded nicely; his compensation nearly doubled to just more than $2 million a year.
Nevertheless, the company's 2.9 million customers still saw double-digit premium hikes.
Stinneford said that is lower than they could have been.
"Our response has been to lower the increase in rates," Stinneford said.
"Again, medical costs continue to increase significantly, and, as a result, premiums are likely to increase."
When its customers began to ask why BCBSNC could not do more for them, the
North Carolina Department of Insurance
formed a special committee to study those concerns.
State regulators have limited authority over BCBSNC even though it is a non-profit. The Department of Insurance can regulate rates for auto and home insurance, but not for health insurance.
The study group likely will take months to complete an investigation.
"We're still not sure that we have any authority to require the company to do anything with their excess profits," Department of Insurance spokeswoman Chrissy Pearson said. "We probably do not have the authority. But, we are going to look at the law carefully."
In some other states, BCBS returned parts of large profits to its customers. But company leaders said they invested the money in improving technology and efficiency.
Blue Cross Blue Shield has made plenty of green in North Carolina over the past couple of years.
The company had $66 million profit in 2000 and $85 million the next year. Combined with its 2002 and 2003 profits, that equals $414 million.
In each of those years, customers paid more out of pocket for health insurance.
When asked if there will be a time when he could envision the rates coming down, Stinneford said: "We'd like to envision that.
"But as long as premiums are going up," he said, "as long as healthcare costs are going up, we would anticipate rates would go up."