This is not the first time something like this has happened. UPMC had the city of Pittsburgh file a lawsuit against them for the same reasons. I think that ended up being squashed but the mayor was the one who filed as the city could use the money. 
The public and government entities are certainly looking like they are keeping a much closer eye on “excess revenues” which is what you call profits for the non profits.
Legal Battle With City of Pittsburgh and UPMC Medical Center Heating Up Again–Non Profit Hospital Pays No Property Taxes & Gets $200 Million Dollar Tax Break With $1 Billion in Excess Profits
I wonder if the state will go after Kaiser Permanente next as they did have 4 times the reserves that Blue Shield has? Kaiser has built some new hospitals and facilities in the last couple of years and that could have eaten some of the reserves but still I think it was around $21 billion they had in reserves.
Officials are arguing that the company is no longer serving the public good and should move forward to be a private company. Blue Cross years ago used to be a non profit and made the change but it was their option and I don’t think that’s on the agenda now at least for Blue Shield. Back when Blue Cross made the change it was less complicated to do so than it is now. One thing you don’t have to be concerned about with Blue Shield though is stock buy backs, and read the link below if you want to see how that impacts what you pay for policies and what kind of policies we get today. BD
Insurance Carrier stock Buy Backs Continue to Rise While Consumers Are Finding It Harder to Afford Some Policies and Care With Dealing With High Deductibles And Narrow Networks…
SACRAMENTO — Blue Shield of California is protesting a state decision to strip the nonprofit health insurer of its tax-exempt status, which the company has held since its founding in 1939.
The California Franchise Tax Board quietly revoked the tax break last August, the Los Angeles Times reported Wednesday.
The decision could put San Francisco-based Blue Shield on the hook for tens of millions of dollars in state taxes each year. The insurer has paid federal taxes for years.
A spokeswoman for the tax agency declined to comment on why the insurer lost its status. The highly unusual action came after a lengthy state audit reviewed the justification for Blue Shield’s taxpayer subsidy, according to the newspaper.
Blue Shield said Tuesday that it’s protesting the decision, but state officials have ordered it to file tax returns back to 2013 in the meantime.
http://www.dailyrepublic.com/usworld/blue-shield-fighting-the-removal-of-tax-exempt-status-by-ftb/
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