Cooper signs Blue Cross NC deregulation bill into law over concerns about profits
Gov. Roy Cooper signed off Saturday on a bill allowing the state’s largest health insurer to move assets into a deregulated holding company, despite transparency and accountability concerns from some top state officials.
Supporters of the new law, including top Republicans in the legislature, say it will help Blue Cross and Blue Shield of North Carolina compete in the fast-moving health care industry.
“Our goal is comprehensive health insurance with access to care in every county of our state at the most affordable cost possible,” the Democratic governor said in a statement announcing he had signed the bill, “and this legislation with consumer protections in place aims to keep the company strong while continuing its commitment to its North Carolina home.”
House Bill 346 takes effect immediately.
Despite the concerns from two top Republican state officials, the bill has had robust bipartisan backing by lawmakers in both chambers of the General Assembly: It cleared the House in late April on a vote of 86-26 and the Senate in late May with a 41-5 vote.
One of those outspoken critics of HB 346 is Mike Causey, the state’s Republican insurance commissioner, who is tasked with regulating Blue Cross NC.
He has said the bill could lead to premium hikes for consumers and would allow Blue Cross NC to skirt regulations by transferring assets to the deregulated holding company. This could lead to money, property and other assets in the holding company being used for for-profit ventures, such as to cut deals with other for-profits and buy out companies.
Causey has also said the insurer’s funds are largely North Carolinians’ money.
“As a nonprofit, Blue Cross NC’s “$7.7 billion in admitted assets and $4.6 billion surplus is, either directly or indirectly, North Carolina policyholder money,” Causey said in late April, during a press conference against the bill. “The investment of policyholder money should be for the benefit of North Carolina policyholders and citizens.”
Another vocal Republican detractor has been State Treasurer Dale Folwell, who said Tuesday at a meeting of state officials that Blue Cross is said to need this legislation because the company lost its contract with the State Health Plan to Aetna. But he said it lost that contract, after holding it for 44 years, due to customer service issues and low scores.
So, Folwell said, as “you are pondering what to do with this legislation,” ask “Blue Cross this simple question. Are there any more large customers that they are ... on the verge of losing?”
Causey said Tuesday he believed the bill “did not have a fair hearing in both chambers because of the pressure Blue Cross put on it politically to get it pushed through,” adding that “it did have bipartisan support, there’s no doubt, but I’m not sure that the legislators heard from all of the folks I heard from across the state.”
Before the Senate vote in late May, Sen. Todd Johnson, a Union County Republican and bill sponsor, said the proposal was “a business restructuring bill and has nothing to do with your insurance policy or premiums. We’re simply leveling the playing field for the only health insurance company that serves all 100 counties in North Carolina.”
Johnson said the bill “is 90% of what the commissioner of insurance was asking for,” which is “a pretty good showing and that’s, no one gets everything that they wish. If we went much further, the bill would have even been more restrictive than currently — than the current law has — and the legislation would not be necessary.”
Democratic Attorney General Josh Stein, who is running for governor, in late May, when the bill was being heard in Senate committees, issued a statement saying he “had serious reservations about early drafts of this bill” but had reached an agreement with BCBS on a series of amendments that “if passed, would enable me to support the amended legislation.”
But no amendments from the House version were passed by Senate committees. Senate leader Phil Berger told reporters after the Senate vote he knew “there had been some conversations about some changes, but I think ultimately the decision was made by the sponsors to go with the bill that passed the House.”
This story was originally published June 10, 2023 at 4:07 PM.
