Mar 11, 2019

Large Blues health insurer pockets $1.7 billion tax refund

Health Care Service Corp. headquarters in Chicago. Photo: Raymond Boyd/Getty Images

Health Care Service Corp. didn't pay a dime in federal taxes in 2018, according to its latest financial report. Instead, the health insurance conglomerate received a $1.7 billion tax refund, which swelled the company's net profit to $4.1 billion.

The big picture: As Axios reported last year, the Blue Cross Blue Shield companies were on track to retain huge sums of money in 2018 due to the Republican tax overhaul and the growing profitability of their health plans. HCSC was among the biggest winners.

By the numbers: HCSC, which is the parent of the Blues plans in Illinois, Montana, New Mexico, Oklahoma and Texas, tallied a net profit of $4.1 billion on $35.9 billion of revenue in 2018 vs. $1.3 billion net profit on $32.6 billion of revenue in 2017.

  • These numbers don't include the fees self-insured employers pay to HCSC for administrative work.
  • A separate financial filing shows the company's plans in the ACA marketplaces were extremely profitable last year: Just 64% of their premiums were spent on medical care, resulting in almost $2.7 billion in gross profit.
  • David Anderson, a health care researcher at Duke University, recently wrote that ACA plans likely will have to pay rebates back to consumers this year because they've set their premiums too high, which occurred in part to offset the uncertainty from the Trump administration.
  • HCSC said in a statement that it would pay any rebates consistent with federal law and that it "experienced record customer retention" last year.

Go deeper: Blues plans lobbied heavily to get tax reform over the finish line.

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Virginia governor announces removal of Richmond's Robert E. Lee statue

Photo: Andrew Lichtenstein/Corbis via Getty Images

Virginia Gov. Ralph Northam announced on Thursday that the state will remove the statue of Confederate Gen. Robert E. Lee from Richmond's historic Monument Avenue.

Why it matters: It's a watershed moment for Virginia, which has been at the center of a years-long national debate about whether Confederate monuments should be displayed publicly. That discussion reached a boiling point when protests about a statue of Lee in Charlottesville turned violent in 2017.

RNC expands convention search across the Sun Belt

Donald Trump, Mike Pence and their families on the last night of the Republican National Convention in Ohio in 2016. Photo: David Hume Kennerly/Getty Images.

The Republican National Committee is planning site visits over the next 10 days to more than a half-dozen cities — across the South and into Texas and Arizona — as it scrambles for a new convention host, people familiar with the internal discussions tell Axios.

Driving the news: The RNC's executive committee voted Wednesday night to allow most of the convention to move — with only a smaller, official portion remaining in Charlotte — after North Carolina's governor said the coronavirus pandemic would mean a scaled-back event with social distancing and face coverings.

Oil faces tough road back from coronavirus

Illustration: Aïda Amer/Axios

Oil companies in the battered shale patch are starting to bring back some production as prices climb, but a new report underscores how the pandemic is taking a heavy financial toll despite signs of revival.

Driving the news: Fourteen North American producers have filed for bankruptcy thus far during the second quarter, per a tally from the law firm Haynes and Boone, which closely tracks the sector's finances.