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December 9, 2004
DISB Calls Hearing on Charges that Non-Profit Blue Cross Fails to Carry Out Its Charitable Obligation
(Washington, DC) Lawrence Mirel, Commissioner of Insurance, Securities and Banking for the District of Columbia, announced today that his agency will hold a hearing on charges that the District’s Blue Cross/Blue Shield plan does not adequately fulfill its charitable obligations.
The hearing is in response to a report recently issued by the DC Appleseed Center, a local public interest group, claiming that Group Hospitalization and Medical Services, Inc. (GHMSI), the District’s Blue Cross plan, which is part of the CareFirst holding company system, is not properly carrying out its responsibility as a non-profit, “charitable and benevolent” organization. The Appleseed report says that GHMSI has a legal obligation to provide funds to support charitable activities in the District and has the available funds to do far more than it is currently doing.
“We take the Appleseed charges seriously,” Commissioner Mirel said, “and we know that the conclusions are disputed by GHMSI. We will hold a hearing on the matter so that the public can learn all the relevant facts.”
GHMSI is by far the largest health care insurer in the Washington area, covering almost half of those who have health insurance, including many federal government workers. It operates in the District, Maryland and northern Virginia. “One important question for the hearing,” Commissioner Mirel said,” is whether, if indeed, GHMSI is retaining more money than it needs to pay future insurance claims, that ‘extra’ money should be given to outside charities or used to lower the premiums or otherwise aid existing policyholders.”
The hearing will be held sometime early next year, at a time and place to be determined. “Appleseed spent many months preparing its report and we need to give GHMSI a reasonable time to prepare a rebuttal,” Mirel said. He said that the hearing will be well publicized and will allow for testimony by any interested persons.
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