BCBSMT to Lege: Kill bill

| February 10, 2005

When a health care nonprofit squirrels away dollars and then converts to for-profit status, who keeps the accumulated wealth? Insurers in particular are required by law to sock away enough money to pay claims. In many states, though, CEOs and corporate officers have tucked away a little extra, converted to for-profit and walked away with the loot. On Friday, Feb. 11, the Montana Senate’s Public Health, Welfare and Safety Committee will hear SB 317, which would regulate health corporations’ piggy banks if health care corporations opt to convert to for-profit entities.

“The [opposition’s] party line is it’s not necessary,” says bill sponsor Sen. Greg Lind, D-Missoula. “That’s reasons number one, two and three.”

The current draft bill would ensure that the state auditor and the attorney general independently approve any such conversion and subsequent distribution of assets. The bill also requires a public hearing on conversions and allows the state to contract with experts to evaluate the impact of proposed conversions on the affected community.

Blue Cross Blue Shield of Montana (BCBSMT), the state’s largest insurer, opposes the bill.

“I’ll emphasize that we have absolutely no intention of converting, but we are still opposed to the bill because as it is written, it does have some articles that put constraints on day-to-day business operations,” says BCBSMT spokeswoman Linda McGillen. The bill, she says, could lead to additional constraints for in-state insurers that out-of-state competitors would not be subjected to.

“We don’t, certainly, want any constraints on our day-to-day business operations,” she says.

Lind is prepared to face BCBSMT lobbyists, whom he witnessed deftly kill a similar bill in a previous legislative session.

“It was an impressive display of corporate influence,” he says. “And that’s the way our process works.”

Last fall, the Independent reported that BCBSMT’s corporate designation was disputed at the state auditor’s office. At the time, Sen. John Cobb, R-Augusta, told the Independent that in the worst-case scenario, BCBSMT had already converted and Montanans wouldn’t get a dime.

BCBSMT and the state auditor’s office are still negotiating.

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