Phila. asks state to reconsider Blue Cross surpluses They should be trimmed to reduce health-insurance costs, it said. A comment period has been extended.

Posted: September 10, 2004

The City of Philadelphia, in an attempt to trim rising health-care costs, has asked the state to reconsider how much money the region's largest health insurer ought to be able to set aside for possible future use.

In a motion prepared yesterday, the city asked State Insurance Commissioner Diane Koken to appoint an "independent public advocate" to represent consumers in her review of financial surpluses for Independence Blue Cross, of Philadelphia, one of four regional Blue plans, which insure most working Pennsylvanians.

The city also asked for a public hearing in Philadelphia; for the right to cross-examine Blue Cross officials before the hearing; and for an extension of the public comment period on the issue, currently scheduled to end Sept. 24. (For more information, see the department's Web site, www.insurance.state.pa.us, and click on "Applications.")

Like other Blue Cross plans, Independence says it needs a comfortable surplus and cash reserve to make sure it can pay all future claims and expenses. Koken's department said in January that it considered the current range of surpluses reported by the Blues - 3 1/2 to 6 1/2 times the state-mandated financial-safety minimum - to be "appropriate."

Independence questions the need for a hearing, because company officials have already testified about their surplus, and consumers have been free to comment. "We believe the Insurance Department has all the information it needs," spokesman Butch Ward said.

But Blues critics, including Lance Haver, head of the city's Office of Consumer Affairs, say the state's Blues surpluses are far higher than national Blue Cross guidelines call for, and should be reduced to trim the health-insurance price increases the Blues have imposed in recent years.

On Wednesday, Koken agreed to extend the comment period to Sept. 24; it had previously been scheduled to end Sept. 14. Her decision followed a motion last week on behalf of a group of labor unions and activists for the poor and aged, as well as requests from legislators, according to Koken's office.

The city's request was made by city solicitor Pedro Ramos and his staff, on behalf of the Office of Consumer Affairs.

Contact staff writer Joseph

N. DiStefano at 215-854-5957

or jdistefano@phillynews.com.

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