D.C. health reform in one simple step
By Walter Smith
Many insurance companies are using their influence on Capitol Hill to oppose the health-care reform proposals before Congress. However that congressional battle plays out, here in the District we have an opportunity right now to compel our largest health insurer to reduce premiums across the region.
Acting D.C. Insurance Commissioner Gennet Purcell is weighing whether CareFirst BlueCross BlueShield’s D.C. affiliate has been overcharging its subscribers, with the result that it has accumulated too much of a surplus. Carefirst’s surplus now totals $687.million. Under a law passed last year by the D.C. Council, the commissioner can direct CareFirst to develop a plan to spend those funds on community health needs — including reduced premiums — if she finds that the surplus is larger than the company needs for financial stability. She would also work with the commissioners in Maryland and Virginia to make sure the plan is fair to all three jurisdictions in which the company operates.
Many people do not realize that CareFirst is a nonprofit insurance provider. In the District, the company operates under a federal charter requiring it to serve as “a charitable and benevolent institution” whose assets are owned by the public. With its 2008 legislation, the D.C. Council determined that it was time to hold the company accountable to that public.
The legislation was necessary because in 2005 the previous insurance commissioner determined that the company should reduce what was then a $500 million surplus, but since then the company has increased it nearly another $200 million.
D.C. Appleseed has long argued that CareFirst has accumulated larger surpluses than needed and is therefore not meeting its nonprofit obligation to the public. Recently, independent experts testified before the insurance commissioner that CareFirst’s surplus is well above industry standards and that of its competitors. The commissioner’s ruling could bring almost immediate premium relief to millions of people in the national capital area. Furthermore, because CareFirst is the dominant insurer in the area, a reduction in its premiums could benefit not just its own subscribers but also those of its competitors, which would be under pressure to cut their rates to keep pace.
The insurance commissioner has invited the public to weigh in on this issue by Nov. 2. The D.C. government’s Web site explains how to do that.
It’s time to hold CareFirst accountable to its mission of making health-care coverage as affordable as possible to as many people as possible.
The writer is executive director of D.C. Appleseed.
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