subject: CareFirst BlueCross BlueShield reserve decision delayed [print this page] Author: chris walker Author: chris walker
Theres another delay in determining whether a CareFirst BlueCross BlueShield Inc. subsidiarys reserves are excessive and should be used to fund health initiatives in D.C.
D.C.s insurance commissioner, Gennet Purcell, held a hearing on the subject in September and had planned to make a decision by Dec. 31, giving Maryland time to study the issue and share them with D.C. But the D.C. Department of Insurance, Securities and Banking now says it will make its decision at a later time. The agency did not specify a particular date.
DISB will benefit greatly from the additional time to analyze and consider the hearing record, and to collaborate with the Maryland Insurance Administration, Purcell said in a statement.
At issue is the amount of cash reserves held by the Owings Mills, Md.-based insurers D.C. affiliate, Group Hospitalization and Medical Services Inc., which covers 1 million members in Northern Virginia, D.C., and Montgomery and Prince Georges counties. The subsidiary has about $687 million in reserves, but critics such as D.C. Appleseed, a nonprofit public policy organization, charge that only about half of that is needed and the rest should put toward community reinvestment. CareFirst officials have said, however, that they would return the money to its policyholders in the form of temporary lower premiums.
Part of the delay relates to the fact that Ralph Tyler, Marylands insurance commissioner, is stepping down this month. No replacement has been named yet.
As part of Tylers review process of CareFirst reserves, MIA hired Invotex Group to do a study released in November. The report affirms what CareFirst has said all along: that the company holds an appropriate level of reserves for the security of its members. Insurers typically keep large cash reserves to cover the cost of catastrophic or unforeseen events such as a pandemic.About the Author:
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