ANNAPOLIS – Lawmakers Thursday introduced the first bill to reform CareFirst BlueCross BlueShild since the Maryland Insurance Commissioner denied the company’s bid to convert to a for-profit company last week.
The bill made a late showing on the House floor, where delegates permitted it to bypass one hurdle, the Rules Committee, and move into the regular committee process.
The legislation is intended to reform nonprofit health service plans and is “a work in progress,” said Delegate Shane Pendergrass, D-Howard, the primary sponsor of the bill.
Pendergrass and Delegate John Hurson, D-Montgomery, waited for the CareFirst decision to be rendered before they submitted a bill.
Maryland Insurance Commissioner Steven B. Larsen denied CareFirst’s bid to convert to a for-profit company last week, ending the company’s prospective purchase by WellPoint Health Networks in California.
In November 2001, CareFirst, the state’s largest nonprofit health insurer, applied to convert to a for-profit company and be sold to WellPoint for $1.37 billion.
The commissioner ruled that the acquisition “would not be in the public interest,” and that the company had violated the state’s anti-bonus provision.
CareFirst top executives initially would have received more than $33 million in bonuses, and the chief executive officer could have received as much as $119 million from the sale of the company.
Larsen said these bonus incentives “were forced on bidders,” and used as a “ransom” to purchase the company.
The bill, HB 1179, will look into reforming the company’s board of directors, including providing oversight of the board, said Pendergrass.
However, the measure is in the beginning stages, she said.
“We have a lot of good ideas.”
The company’s goal should be public service and affordable insurance. Everyone should weigh in, including the commissioner, Pendergrass said.
“We are pleased that the Legislature has reached out and asked us to be involved in crafting and refining this bill,” said Jeff Valentine, CareFirst director of corporate communications.
Valentine could not talk in detail about the bill because the company hasn’t had the chance to analyze it.
The bill will be heard next week in Pendergrass’ committee, Health and Government Operations, and Sen. Thomas Middleton, D-Charles, is working on similar legislation in the Senate.