ANNAPOLIS – A bill requiring CareFirst BlueCross BlueShield to prove its proposed conversion to for-profit status will be in the public’s interest passed the House Economic Matters Committee Thursday, which may make the health care provider’s quest a lot more difficult.
If the bill, which heads to the House floor Tuesday, passes, CareFirst would have to prove the conversion and its proposed sale for $1.3 billion to Wellpoint Health Networks Inc. would be in the best interest of Maryland citizens.
“I think the chances of (the bill) passing are like Ivory Soap,” said Economic Matters Committee Chairman Michael Busch, D-Anne Arundel. “99 and 44/100 percent pure. It should pass with 138 votes.”
As the law stands now, the burden falls on Insurance Commissioner Steve Larsen to determine public interest. If he determines the sale is not in the public interest, the sale would not take place.
“It really affects them more than me,” Larsen said of the proposed bill.
Larsen said he is assembling a panel of experts to examine the possible benefits and affects if the sale goes through. He said he would make a decision soon after the panel completes its review, which is expected to take about 12 months.
The bill is just one step taken by lawmakers to kill the nonprofit health care company’s proposed sale and conversion to the California company.
Just a day earlier, lawmakers introduced bills that targeted CareFirst by pushing it to return to its generally perceived status of being Maryland’s insurer of last resort. CareFirst has been trying to distance itself from such a designation, which implies it would provide insurance to those who are generally considered high risk, such as the terminally ill.
“Are we the insurer of last resort?” said Fran Doherty, vice president of government affairs for CareFirst, at a House Ways and Means Committee meeting Thursday. “I’d say no, we are not.”
Under a bill proposed by Sen. Robert R. Neall, D-Anne Arundel, CareFirst would have to operate a managed care organization in the State Medical Assistance Program to receive tax breaks. CareFirst currently receives tax exemptions based solely on the fact that it is a nonprofit.
Doherty argued the company needs to convert so it can compete with other insurance companies as well as to generate enough revenue to cover capital expenses.
“We do need to make a profit and create a surplus . . . to remain competitive and provide services,” Doherty said. “We feel for now, this is the best thing for us to do.”