Opposing Premera’s Conversion Proposal

Whereas Premera Blue Cross of Washington and Alaska has proposed to Washington’s State Insurance Commissioner to convert from a non-profit medical insurance company to a for-profit, publicly traded corporation, and

Whereas Premera Blue Cross is one of the largest providers of health insurance coverage in Washington state with more than 20% of the market share, and

Whereas because of its large market share, Premera’s conversion to a for-profit corporation would have far-reaching implications for the health care market and all health care consumers in Washington state, and

Whereas many organizations in Washington including the Washington State Medical Association, the Washington State Hospital Association, the Association of Washington Public Hospital Districts, Multicare Health System and others have publicly opposed the conversion and some have filed suit to block the conversion, and

Whereas Premera has been particularly reluctant to supply sufficient detail that will allow a thorough assessment of the effects of conversion on patients, physicians, communities and some publicly funded health care programs, arguing such information is proprietary and confidential, and

Whereas in recent months, proposed conversion plans have been rejected in Kansas and Maryland on the basis that cost, quality and access to care would be unduly harmed by the conversion, and

Whereas the University of Washington’s Health Policy Analysis Program has yet to complete its study on the effects of the conversion with regard to the individual market (especially if the converted corporation withdraws from the individual market), publicly funded insurance programs (BHP, SCHIP, Medicaid), rural communities’ access to care, health care providers and reimbursement rates, and the possibility that a conversion would have the effect of increasing the number of national for-profit health insurers entering the Washington market, and

Whereas evidence from states where conversions have been permitted is mounting that patient care, provider reimbursement, cost, quality and access to care have all suffered negative consequences, and that rural areas are particularly burdened, and

Whereas the Washington State Public Health Association has a long history of supporting a health care system that denies care to no one,  

NOW THEREFORE BE IT RESOLVED that WSPHA opposes Premera’s proposal to convert from a non-profit medical insurance company to a for-profit corporation until such time as it can be assured that concerns about cost and quality of and access to health care and reimbursement to providers will suffer no harm due to the conversion, and

FURTHER BE IT RESOLVED that WSPHA requests the Insurance Commissioner to deny Premera’s proposal until Premera makes public information on how the conversion will affect patient care as well as its impact on providers and health care consumers and promotes a public process for the discussion of its findings and assertions, and

FURTHER BE IT RESOLVED that until adequate longitudinal information from other states where conversions have been approved is available, WSPHA urges the National Association of Insurance Commissioners to consider a moratorium on the approval of any further conversions, and

FURTHER BE IT RESOLVED that if said conversion takes place that reserves should be used to enhance public health programs.

Signed by: John Wiesman, WSPHA President 2002-2003