Legislature needs to go slow on far-reaching Blue Cross NC proposal | Opinion [The Charlotte Observer]

When they receive a copy of a new health insurance policy, most people don’t look at the fine print until they have a claim denied.

Millions of North Carolinians insured by Blue Cross NC may have a similar regret with the dense but consequential wording in House Bill 346, which is now steamrolling through the General Assembly. The proposed law could affect 4.4 million North Carolinians insured by Blue Cross directly or through company health plans.

Despite its support among lawmakers, the bill needs much more outside review or at least far more extensive public hearings.

The bill concerns a change in the organization of the state’s largest health insurance provider. It would allow Blue Cross NC to create a nonprofit holding company that would own the current company and its subsidiaries. Some of Blue Cross’ more than $4 billion in assets would be transferred to the holding company.

Blue Cross says the change would give the company more flexibility in competing with for-profit insurance providers by allowing it to purchase other companies to enhance its services to policyholders.

But opponents of the change say it also would allow Blue Cross NC to avoid a requirement that it issue refunds to policyholders when its profits exceed its necessary reserves. The change also would greatly reduce oversight of the company’s actions by the state insurance commissioner.

The legislation’s opponents include state Treasurer Dale Folwell, Insurance Commissioner Mike Causey and Martin Eakes, a consumer advocate who challenged a move by Blue Cross NC to become a for-profit company in the late 1990s.

Causey held a news conference on the bill Monday in which he displayed a slide that said: “This bill is about corporate greed.” He said Blue Cross NC is trying to shed state regulations that would free it to take greater risks that could lead to higher premiums for millions of North Carolinians.

“I think that this legislation is missing many provisions that are necessary to protect the people, the policyholders,” he said.

Eakes, the co-founder of Self-Help, a Durham-based community development lender, said the proposed conversion is moving forward with little public debate on the potential consequences. “If you don’t have sunshine to shine on something like this, bad things can happen,” he said.

Eakes doesn’t mind if Blue Cross NC wants to convert to a for-profit company. But he doesn’t think Blue Cross should be allowed to transfer assets accumulated through tax breaks and North Carolinians’ premium payments into a separate and less-regulated holding company. Those assets should be set aside in a foundation serving North Carolinians’ health needs, he said.

Despite those objections, the Blue Cross bill has bipartisan support in the General Assembly. Many of the state’s lawmakers have signed on as co-sponsors. But that support may be less about the merits of the legislation and more about the lobbying power of Blue Cross.

In a comprehensive overview of the legislation, NC Health News reported that Blue Cross NC spent $557,964 on lobbyists last year and this session it has 14 lobbyists working the General Assembly, including former Republican House Speaker Harold Brubaker. The report added that Blue Cross’ political action committee made about $277,000 in campaign donations to state candidates in the 2022 cycle.

Also in the report, Barak Richman, a Duke Law School professor who studies health care consolidation, makes the sensible point that North Carolina should look before it lets Blue Cross leap into the insurance industry’s heated competition to acquire companies and control health care.

“The legislature has to do more than just listen to Blue Cross lobbyists,” Richman said. “I mean, have there been any hearings? Have there been any studies that have been commissioned? We have, I always like to think, some world-class health care scholars in the state. I don’t think that any of them have been called.”

North Carolinians deserve to have those experts read the fine print before this bill becomes law.

©2023 The Charlotte Observer. Visit charlotteobserver.com. Distributed by Tribune Content Agency, LLC.