Blue Cross and Blue Shield of Maryland has an opportunity to clear the air when its officials appear before the House Economic Matters Committee on July 28. State Insurance Commissioner John A. Donaho has made a number of troubling statements about the management of the Maryland Blues and his inability to effectively regulate the non-profit organization, which provides health insurance to almost half of the state's citizens.
Determining the true financial condition of Maryland Blue Cross is an issue that deserves immediate attention. There seems to be a wide difference of opinion between the insurance commissioner and Carl J. Sardegna, the chief executive officer of the Maryland Blues. Mr. Donaho told the U.S. Senate Permanent Subcommittee on Investigations he was concerned about the insurer's solvency. Mr. Sardegna called those comments "irresponsible" and pointed out his organization posted profits during the past three years.
Another issue that deserves attention is Mr. Donaho's assertion that his efforts to effectively regulate the Maryland Blues have been thwarted. Given its serious responsibility of regulating very large insurance companies, the Insurance Division has been seriously shortchanged by the governor and the legislature. Insurance companies volunteered to pay a special levy for examinations, but it was rejected by the legislature. That offer should be renewed.