Blue Shield of California’s chairman and CEO is stepping down

Blue Shield of California’s longtime chairman and chief executive, Bruce Bodaken, is stepping down at the end of this year, punctuating a career marked by praise for his early support of universal health coverage and later scorn for his company’s big rate hikes and his generous compensation.

Bodaken is expected to relinquish his posts as chairman and chief executive at the end of December, according to a person familiar with the company’s plans. Paul Markovich, currently the chief operating officer at the nonprofit health insurer, will succeed Bodaken as chief executive.

Bodaken, 60, was promoted to chairman and chief executive in 2000 after joining the San Francisco-based company in 1994.

A spokesman for Blue Shield couldn’t be reached for comment early Wednesday. A company announcement is expected shortly.

The company disclosed Bodaken’s salary for the first time last year to comply with a new state law designed to better examine premium increases. He earned $4.6 million in 2010, but the company hasn’t updated that figure for 2011 in rate filings to the state.

Unlike other insurance executives, Bodaken supported universal health coverage as early as 2002 and later backed former Gov. Arnold Schwarzenegger’s effort to expand coverage to all Californians, an approach later championed by President Obama and supported by Blue Shield.

But he and his company also have been roundly criticized for imposing hefty premium increases and amassing significant reserves far beyond what regulators require. Blue Shield reported reserves of $3.77 billion for the first quarter ended March 31.

In response to the criticism over its rates, Blue Shield announced last year it would begin issuing credits to customers if its net income exceeded 2% of revenue. As a result, the company said it returned about $450 million to individual policyholders last year, which reduced members’ rates by about 7%.

In the first quarter, Blue Shield reported revenue of $2.5 billion and a profit of $138 million. It posted annual revenue of $9.53 billion last year and had about 3.3 million members statewide.

Markovich has spent 14 years at the company. The North Dakota native played hockey in college, and he was a Rhodes scholar. Before joining Blue Shield, he served as a management consultant for Booz Allen and Hamilton in New York.