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Sunday, July 14, 2024

N.C. insurance commissioner opposes Blue Cross-backed bill

By Ray Gronberg

State Insurance Commissioner Mike Causey says he doesn’t support “in its current form” a General Assembly proposal to give Blue Cross and Blue Shield of North Carolina permission to transfer assets to a new nonprofit holding company.

Instead, “we should slow this process down, put this bill before a study committee and see what changes are needed to best protect the interest of consumers,” Causey said in a statement his office emailed to the N.C. Tribune last week.

He added that he worries the bill:

  • Will “harm consumers and has the potential to raise health insurance premiums in the future”;
  • Is “a backdoor route to get around the conversion statutes the General Assembly passed in the 1990s”;
  • And undermines the Department of Insurance’s ability “to regulate for the public interest.”

Causey’s statement alluded to House Bill 346 and Senate Bill 296, which Blue Cross and legislative supporters argue would give the insurer the additional flexibility it needs to compete in the modern era.

The bill would allow Blue Cross to restructure, subordinating itself to a new nonprofit that would absorb at least some of its current assets and that would have greater freedom to pursue business and investment opportunities.

The Department of Insurance would retain the ability to supervise asset transfers, but they would be exempt from the so-called “Conversion Act” that otherwise requires the creation of a foundation to receive 100% of the insurer’s fair market value.

The lead sponsor of the House version is Rep. John Bradford, R-Mecklenburg. Co-sponsors include the majority and minority leaders of the chamber, Reps. John Bell, R-Wayne, and Robert Reives, D-Chatham.

The bill faces opposition from Martin Eakes, the longtime CEO of Durham-based Self Help Credit Union and an opponent of prior Blue Cross conversion efforts dating back more than 25 years.

The Senate version’s lead sponsors are Sens. Todd Johnson, David Craven and Dean Proctor, Republicans from Union, Randolph, Catawba counties, respectively.

Legislative study committees are ad-hoc bodies that generally work over the winter to try shaping a consensus strategy for addressing difficult issues.

This story originally appeared in the North Carolina Tribune.

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