What the Blue Cross Blue Shield bill is really about | Eastern North Carolina Now


By Andrew Dunn

What the Blue Cross Blue Shield bill is really about

It's about money: $4.6 billion in cash. But it's also about the role this company should play in our state.

Insurance Commissioner Mike Causey is not the most vocal politician in the state.

So it was a noteworthy surprise for Causey to hold a press conference last week hoping to slam the brakes on a bill speeding through the General Assembly with broad support.

The short version is this: Blue Cross Blue Shield of North Carolina, the state’s largest and most powerful health insurance company, is pushing a bill that would fundamentally change its structure and relationship with the government.

The bill is about money, mostly. But it’s also about what role a homegrown nonprofit should play in our state.

It’s a fairly nuanced issue, but it’s not getting the open and honest debate that it deserves. Here’s what you need to know about the bill.

What this bill does

House Bill 346 is pretty technical in its details, but it’s actually fairly simple. The bill seeks to change how Blue Cross can manage its $4.6 billion — and growing — in reserve cash.

Under the status quo, the company can't amass much more than that without triggering laws requiring it to cut rates or send refund checks to customers. But Blue Cross wants the ability to use that money to make investments it says will help it better compete with insurance giants like Aetna and UnitedHealthcare.

In Causey’s press conference, he said the bill allows BCBSNC side-step regulations and would let them raise rates higher than they would otherwise.

“My concern is that North Carolina money will be used for investments that won’t benefit North Carolina,” he said. “As a nonprofit company, Blue Cross North Carolina is very much an asset of North Carolina … I just hope that we can convince our legislators to slow this bill down and take a hard look at it.”

But Rep. John Bradford, a Mecklenburg County Republican and one of the chief advocates for the bill, said it's simply about letting Blue Cross better compete in the modern health insurance arena.

“They’re a mission-driven organization, and they’ve been characterized as having corporate greed. I think that is unfair in a big way and a mischaracterization at the highest level,” Bradford said Wednesday, as reported by Carolina Journal. “This is a business regulatory reform bill. … I believe in equality for businesses to compete, and that’s what we’re trying to do.”

Why this matters

Depending on how you slice the data, Blue Cross Blue Shield of North Carolina has either a 55% or 80% market share in North Carolina. In many rural parts of the state, BCBSNC is a person's only option when it comes to health insurance. So it's worth taking a step back briefly to consider how it got there.

Blue Cross Blue Shield of North Carolina dates back to the early 1930s, starting as a voluntary association that allowed families to set aside money every month for future hospital bills. The company came under the purview of the General Assembly in 1941, and it has remained a nonprofit to this day. This has given it significant tax advantages but also comes with strings attached — like the reserve cap we mentioned earlier.

These organizations were fully tax-exempt until the 1980s, but now pay corporate income taxes. In some states, Blue Cross organizations have converted to for-profit companies. That hasn't happened here, and BCBSNC says it wants to remain a nonprofit. But the company has regularly pushed for more freedom to operate like a for-profit, and this bill is just the latest example.

As a reflection of that, the General Assembly passed a law in 1998 that would require Blue Cross Blue Shield to set aside a giant pot of money — the amount of its market value — into a foundation for public purposes should it convert to a for-profit or otherwise change its structure. It was essentially a “poison pill” to keep Blue Cross a state-focused nonprofit.

This new bill represents a significant reversal in how the General Assembly views Blue Cross Blue Shield of North Carolina. It would essentially allow Blue Cross to circumvent that 1998 law.

It’s a reflection of how powerful and politically connected Blue Cross has become. The company gives generously to candidates on both sides of the aisle, and its board includes political powerhouses from across the state. All sides agree that the company essentially wrote the bill and is pushing it through the process.

The bill also lays bare the divisions between big-business Republicans and more populist conservatives skeptical of corporate influence. And it represents yet another issue this session in which establishment Republicans and Democrats are pushing legislation across the finish line against opposition from both the left and right.

Why it’s controversial

Over the past decade, the prevailing narrative has been that of a Republican majority working cohesively to pass legislation over unified Democrat opposition. And to be sure, there have been plenty of party-line votes.

But there have been a surprising number of issues, particularly this session, that have the support of leadership in both parties, but opposition among small numbers on both the left and the right. Medical marijuana and sports gambling are examples, and this Blue Cross bill is another.

There's a real difference in vision between the two sides of this bill.

On the one side, supporters of the bill see Blue Cross Blue Shield of North Carolina as an important player in a national industry and are sensitive to the company's concerns about being hamstrung in the market. 

Then on the other side, you have people who remember the company's roots and see it as a nonprofit with a special purpose and special responsibilities.

I honestly see merit in both sides, and there's a good faith argument to be had in both directions.

So, should it pass?

This bill seems almost certain to pass. The House voted overwhelmingly in favor of it, 88-26. The Senate version of the bill counts powerful figures like Sen. Ralph Hise (R-Mitchell), Sen. Jim Perry (R-Lenoir) and Democratic Leader Sen. Dan Blue as co-sponsors.Gov. Roy Cooper has yet to take a public position on the bill, though Causey said he’s been told that the governor is on board.

However, the speed at which this bill is moving is troubling. It rushed through House committees and to the floor in a matter of days, with only a few minutes dedicated to discussion, public comment and debate. For that reason alone, I would have voted “no.”It’s worth slowing down and fully understanding the reasoning behind the bill, not just the corporate spin.

Blue Cross Blue Shield of North Carolina has a special role in the state, and with that comes special responsibilities. It’s not a typical big business, and the state has given it plenty of support over the past eight decades.

Perhaps this bill is necessary to keep it strong enough to effectively serve North Carolinians. But legislators should take a skeptical approach and demand clear and public answers to how this bill would benefit the people of North Carolina.


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Comments

( May 5th, 2023 @ 9:07 am )
 
The sponsor of this bill allowing Blue Cross to loot its own reserves, which is contrary to the interests of those covered by its health insurance, was sponsored by a liberal Thom Tillis Republican, Rep. John Bradford (RINO-Mecklenburg). In fact, Bradford was Tillis' own hand picked replacement when Tillis left the seat to go to Washington. Bradford also has a liberal voting history on major liberal bills, like letting men into women's restrooms and locker rooms, saddling electric ratepayers with NC's Green New Deal, and socialized medicine with the Obamacare Medicaid expansion. Now this liberal scumbag wants to succeed outstanding conservative Dale Folwell as our State Treasurer. That is just not acceptable.
( May 3rd, 2023 @ 11:32 am )
 
Senator Jim Perry AGAIN????? That RINO turns up like a bad penny every time liberal Republicans are selling us out to the special interests.
( May 3rd, 2023 @ 6:41 am )
 
I have great respect for Insurance Commissioner, Kike Causey. He as never lot us down. We need to follow his advice. Both Blue Cross and the hospital industry are too powerful in the legislature. They are using money, money and money against the average citizen.
( May 2nd, 2023 @ 1:48 pm )
 
What this guy calls "big business Republicans" most of the rest of us would call establishement Republicans, RINOs, or liberal Republicans. Big business no longer aligns with free market capitalism but instead pushes crony capitalism, and this is quite frankly a crony capitalist bill. Small and medium sized business still generally follow the free enterprise concept, and that is why they have been dropping their membership in the crony-capitalist US Chamber of Commerce in droves. A "big business bill" is almost always going to be a bill giving some aspect of big business an undeserved favoritism and that is what crony capitalism is all about, using government to give your business an unfair advantage over competitors. That usually means big business getting an advantage over smaller competitors.

A good ecample was the NC Green New Deal bill. While small and medium sized businesses came out to the hearing on the bill, HB951, to oppose it because it will raise their electric costs significantly, and consumer representataives did the same, the crony capitalist NC Chamber of Commerce supported the bill, because one of its influential members, the state electicitry monopoly Duke Energy would make money off of it.

This writer with Long Leaf Politics just doesn't seem to get it, while the Daily Haymaker understands it perfectly. Crony capitalists are not the friends of ANYONE else, not small and medium sixed business, and not consumers. The Chamber of Commerce, state or national, has not represented the interests of small and medicum sized business in years, but pushed corrupt crony capitalism instead, and this bill is but one example of crony capitalism. The politicians who hook their wagon to crony capitalism are not the friends of free enterprise or of consumers, either.
( May 2nd, 2023 @ 7:32 am )
 
This is a major bill that marks a special interest Republican, one who thumbs his nose at the voters back home in order to carry water for the powerful special interests. It is what special interest whore Sen. Jim Perry (RINO-Kinston) does all the time, and he is in the lead for the special interests on this one, too.

On the other hand, we can thank Rep. Keith Kidwell for standing up for conservative principles on this bill. Most of the opposition to it came from the conservative Freedom Caucus which he leads.

While Long Leaf Politics is sort of a center right source, a more solidly conservative source gives the real scoop on this bill and the role of the "bent" legislative leadership, Tim Moore and Phil Berger, in ramming it through. They are whores for the special interestes and care nohting about grassroots Republicans or Republican principles.
dailyhaymaker.com



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