business
Bill would ease restrictions on Highmark-BCBS Delaware deal
■ If the governor signs the measure, the state's Blues plan won't have to funnel millions of dollars in reserve to a nonprofit foundation.
By Emily Berry — Posted July 14, 2011
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Delaware lawmakers have passed a bill making it easier for the state's Blues plan to become an affiliate of Pittsburgh-based Highmark without giving up its financial reserves.
Gov. Jack Markell plans to sign the bill into law, a spokesman said. The bill was passed June 29.
Markell's signature would mean that Blue Cross Blue Shield of Delaware could keep its financial reserves -- about $173 million as of May 2011 -- once the deal is complete.
Delaware Blues executives say the affiliation would give them access to money they need to invest in new technology.
Under a 2004 state law, if an insurer "converts" to a for-profit company and merges with another health plan, the attorney general reviews the transaction and can order the Blues to pay back the money the company has kept as a result of its nonprofit status. The law was enacted during a wave of for-profit Blues conversions around the country.
State Attorney General Beau Biden ruled June 1 that even though both companies are nonprofits, the proposed Highmark affiliation constituted a "conversion."
The new law would exempt the Blues plan from those requirements. "We agree that the bill clarifies the language of the 2004 [law] to reflect its original intent," the company said.
Biden "still believes that the 2004 law is the most robust way to protect taxpayer dollars," Jason Miller, a spokesman for the attorney general's office, said in a statement.
Approval of the deal rests with state Insurance Commissioner Karen Weldin Stewart. She plans to host a public hearing on the issue in the fall and make her decision later, said Elliott Jacobson, senior adviser to the commissioner.
