Lines drawn on use of cash

Md. leaders at odds on how to spend CareFirst dollars

March 28, 2001|By Michael Dresser | Michael Dresser,SUN STAFF

The Maryland Senate and House of Delegates are headed for a showdown over what to do with the hundreds of millions of dollars the state could receive if CareFirst Blue Cross Blue Shield converts to a for-profit company.

The House unanimously passed legislation Monday night that ties a provision believed necessary to any conversion to a plan to set up a health "insurer of the last resort" similar to the Maryland Automobile Insurance Fund.

Del. Michael E. Busch, chairman of the House Economic Matters Committee, said House leaders feel strongly that any money the state receives from a conversion of the giant nonprofit should go toward creating a "safety net" for hard-to-insure people.

But Busch's vision of what should be done with the money conflicts with the plans of Sen. Thomas L. Bromwell, chairman of the Senate Finance Committee. It is Bromwell's panel that will consider the House bill, and the chairman vowed yesterday to resist the House plans.

The dispute over the potentially huge pool of money sets up a clash of Annapolis heavyweights. Each says he is willing to see the bill die rather than accept the other's formula.

If the legislation fails, CareFirst's prospects for becoming a for-profit concern could be dashed, too.

Under current law, the company must receive the support of two-thirds of its members in order to make the change - which would be in line with the industry trend for Blue Cross affiliates throughout the country.

The company and lawmakers think this is an all-but-impossible hurdle and agree it should be repealed in case CareFirst does move toward conversion - a step it is considering.

"These days, you can't get two-thirds of people to agree on anything," Bromwell said.

By tying repeal of the two-thirds requirement to its health insurance plan, the House is signaling that it prefers no conversion to one that is done under current law, which is what Bromwell supports.

Commissioner's decision

Under the current law, if CareFirst decides to change its status, the state insurance commissioner would determine how much the company would have to compensate the state for years of tax advantages it has been given for insuring those who otherwise couldn't get insurance.

Estimates range from hundreds of millions of dollars to more than $1 billion.

The law now directs that money to the Maryland Health Care Foundation, a quasi-public entity set up in 1997. Bromwell, a Baltimore County Democrat, is quite content with directing the money to the foundation. But Busch thinks it's ill-equipped to deal with such large sums.

"A board of directors is basically nothing more than a board of directors that passes out grants," the Anne Arundel County Democrat said. "It's not a group that will have an overall mission and policy statement."

But Bromwell said he's quite pleased with the foundation as a place to "park" the money.

"I'm not setting up another insurance company," he said.

Bromwell professed to be unconcerned about losing the provision repealing the two-thirds requirement. "I'm not carrying the flag for Blue Cross conversion," he said.

No position yet

So far, Gov. Parris N. Glendening has not taken a position on whether conversion should go forward or how any proceeds should be spent. Glendening spokesman Michael Morrill said administration officials were discussing the issue with key legislators and was not favoring either the House or Senate approach.

"The governor's ultimate goal is to see that [the money] is used to meet unmet health needs," Morrill said.

The matter probably will be resolved - or bargained to an impasse - in a conference committee that will include the two powerful chairmen. Busch said that with the session ending April 9, the question could go down to the wire.

"Most of these things are resolved in the last 48 hours, and I don't have any reason to suspect this'll be any different," Busch said.

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