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Blue Shield’s tax exemption loss could trigger cascade

It came as a bit of a shock when Blue Shield of California–not only one of the state’s largest insurers but one of its largest not-for-profit organizations–lost its state tax exemption. But it begs the question–which healthcare entities may be next on the chopping block?

State regulators in California cut off Blue Shield’s tax exemption last year, although it was disclosed just in recent weeks.  A former Blue Shield executive said that the health plan would have to surrender a significant proportion of its assets in order to redeem itself and hope to recapture its tax-exempt status anytime soon.