Time to trust process in CareFirst conversion

With safeguards: Don't prejudge regulator's examination, but allow the Assembly to pass on his work.

April 05, 2002

TO FULLY appreciate the legislature's hostile attitude toward CareFirst BlueCross BlueShield, consider this:

A bill that dismantles the company board and could send its management out the door passed in the House of Delegates, unanimously. A series of other hobbling measures have a good chance of passing -- so angry are delegates and senators about various aspects of the company's for-profit conversion plan. Confirmation that top CareFirst executives would get $33 million if the conversion were to occur explains much of the antipathy.

But lawmakers must take care to employ a measured approach as they consider all these bills, including the House-passed restructuring plan. It would go into effect only if conversion were denied. At that point, the Assembly believes it must be prepared to reorganize the company to operate as a nonprofit committed to covering more uninsured Marylanders -- something the bill's sponsors say is not happening now.

A less controversial bill does what needs to be done now without doing unintended damage: It leaves decision-making in the hands of Steven B. Larsen, the insurance commissioner, but gives the Assembly a chance to review his ruling within 90 days. That bill must pass.

After his experts digest the material, another round of hearings is planned for next fall. Then he will decide whether the conversion is in Maryland's best interest.

That process, established by the General Assembly, should continue. The Assembly must reserve the right of review, but it must have in hand the fully considered judgment of its well-respected regulator.

CareFirst says a larger company would be better able to address the medical insurance needs of Marylanders. The Assembly doubts that assertion, to put it mildly. Legislative leaders say they are attempting to strengthen the regulator's hand.

In effect, lawmakers are belatedly demanding that CareFirst perform the functions it was set up to perform -- and was encouraged to provide by substantial incentives.

One bill offered this year called for an audit of CareFirst's operations to determine if the company is providing insurance for those who have trouble getting coverage elsewhere. The state legislated discounted hospital rates in exchange for a promise that these difficult-to-insure Marylanders could find coverage.

Opponents of conversion say the company's sale to WellPoint of California would require the state to start from scratch to create the insurer of last resort some had thought was CareFirst's role. Company executives say their proposal would -- using money from the sale -- take Maryland closer to that goal. Legislators fear a for-profit operator would impose higher premiums and offer lower services.

Conversion may have to be stopped. But that action should not come as a result of legislation passed before all the facts have been gathered and analyzed by experts who have no political or financial stake in the outcome.

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