Insurer wound share reserves under bill

http://www.newsobserver.com/business/nc/story/2335703p-8713739c.html

A freshman state lawmaker wants Blue Cross and Blue Shield of North Carolina to share its wealth.

Rep. Bill Faison, a Democrat who represents Orange and Caswell counties, on Wednesday introduced legislation that would force the not-for-profit health insurer to hand over some of its $865 million in reserves. That pool of money surged as the company made more than $350 million during the past two years.

The bill would limit the amount of cash health services corporations -- a designation that applies only to Blue Cross and one much smaller insurer in the state -- could keep on hand for unexpected expenses. Anything over the limit, which would be determined by a complex formula, would go to a state trust fund to buy health coverage for the uninsured.

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Blue Cross' levels of profitability and reserves have been a subject of intense interest for some time. The insurer set off alarm bells last spring when it announced income of nearly $200 million for 2003, even as it continued to extract double-digit rate increases from its customers. Most health insurers achieved record results that year, but regulators and industry experts questioned the need for such riches at a not-for-profit plan. Blue Cross reported earnings of about $156 million in 2004.

Thank goodness we have tort reform to protect us from greedy patients who try to collect benefits to which they are entitled.