At today's hearings on Maryland Blue Cross and Blue Shield's request to set up a for-profit company, the insurance commissioner had better ask some hard questions.
Blue Cross wants to sell stock to raise $50 million so it can effectively compete with other insurers and better manage its health maintenance organizations (HMOs). The move has won a preliminary nod from employers that buy group insurance from the Blues and even from Insurance Commissioner Dwight K. Bartlett III.
The proposed change will affect millions of Marylanders, not just the 1.4 million persons now covered by the non-profit Blues organization. The Blues are the largest health insurer in this state, influencing the entire health care system.
In defense of its non-profit status, which avoids taxes on bTC for-profit insurance companies, Maryland Blues have always pointed to their mission as the "insurer of last resort." That pledge is now under scrutiny. So, too, is the Blues' widely accepted system of "usual, customary and reasonable" payments for health care providers, which has helped restrain medical charges in Maryland.
There is also the question of who will benefit from the profits of the for-profit company: the new stockholders or the policyholders whose premiums have repeatedly bailed out the company from financial troubles? Will administrative costs be shifted unfairly between the non-profit and for-profit branches of the organization?
Even more basic: How can the Blues be expected to perform more efficiently as a tax-paying, profit-making insurer than it has in the past with all the breaks given a non-profit concern?
So far, the Maryland Blues have not done a good job of explaining their plan. The company's statement refers tersely to financial restructuring feasibility and competitiveness in managed care, without elaboration. Its 230-page technical filing provides little insight to the public.
Neither has the insurance commissioner's staff provided the public with an analysis of projected changes; that absence will limit informed, meaningful comment from the citizenry. We urge Mr. Bartlett to make available this analysis promptly and to extend the hearings to allow educated input from those affected by this important issue.