NC Blue Cross: Tax cut helps charities, rate hikes lessened
DURHAM, N.C. (AP) — North Carolina’s largest health insurer said Thursday its windfall from the new federal tax cut will hold down rate increases in the future, but this year it will use it to give charities $40 million and pay employees a $1,000 bonus.
Blue Cross and Blue Shield of North Carolina said it will give away millions this year for health initiatives and give bonuses to about 4,700 employees. The company said premiums are expected to keep rising, but by less than they would have after tax savings are applied to most policies in 2019.
Most 2018 rates were set by the time Washington finalized the tax cuts in December, but the windfall could translate into smaller cost increases for customers with policies renewing this October, Blue Cross spokesman Austin Vevurka said.
The company declined to describe how much it estimated saving on its tax bill or why it opted to spend the savings on new technology, community health efforts and employee bonuses rather than holding down premium increases later this year. Charlotte-based Duke Energy Corp. said earlier this month it projected $276 million in tax savings on North Carolina operations but didn’t specify how much it’s willing to pass along to customers.
“We look forward to continuing to invest in North Carolina’s communities and using future tax savings to offset premium increases for our customers,” Dr. Patrick Conway, the health insurer’s CEO, said in a statement. “The Blue Cross NC mission is to improve the health and well-being of our customers and communities, and we are proud to be doing just that.”
Blue Cross said its community spending will focus on fighting opioid abuse, improving early childhood development and primary care, and social problems that harm health. Most of the giving will be announced later, but some of the programs receiving early awards of $1 million or more include a residential treatment program for substance abusers, a group that tries to prevent child abuse, services for domestic violence victims, and funding to train physician assistants at the University of North Carolina at Chapel Hill medical school.
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