[Question Concerning Proposed Blue Cross and Blue Shield Association Refund]

GAO was asked to address the legality of a Blue Cross and Blue Shield Association proposal to refund $754 million to its subscribers and the government. The refund would be made from a surplus in the association's special reserve which arose because the rates the association charged over several years exceeded the cost of the benefits it provided. A recent Department of Justice opinion held that the proposal was legal, except that the association could not make refunds to annuitants. GAO did not take exception to the Justice opinion and agreed that the proposal was legal.