Consumers Union, the publisher of Consumer Reports, released a report on July 22 focusing on nonprofit Blue Cross and/or Blue Shield Plans and their surplus (reserve) levels. The report attempts to draw the conclusion that reserve levels should be lower and used to offset premium increases.

BCBSAZ is proud of our 71-year history of stability, which allows us to care for our members and invest in the communities we serve. Ultimately, our responsibility is to those who count on us, and only that can be the driver of making sound business decisions. That is why we want you to know a few things about BCBSAZ reserves:

• Premiums reflect the ongoing costs of health care, whereas reserves are monies that are set aside for unexpected, catastrophic expenses for the protection of our customers.
• Our reserve levels are appropriate for the financial risk we assume for our customers and the 18,000 health care providers who rely upon us to pay claims (totaling more than $1.2 billion in 2009). The amount we have in reserves equals six months of expenses – an amount that ensures our future stability and ability to provide health care services to our customers.
• Using reserves to buy-down premium increases would only serve as a temporary fix that would not address the underlying problem of rising health care costs.

We appreciate the continued support of our more than 1.3 million customers, 18,000 health care providers and many business partners in our effort to remain a strong and vibrant company.