You may have heard that D.C. Councilmember Vincent Orange held a hearing Wednesday to determine when CareFirst BlueCross BlueShield is going to be required at long last to comply with the law of the District of Columbia.
The bad news is that the Council passed a law nearly seven years ago requiring CareFirst to stop building excess surplus and to spend down its excess to address community health needs. The further bad news is that the D.C. Court of Appeals ruled unanimously more than three years ago that CareFirst must comply with that law. And even more bad news is that CareFirst has still not been required to comply.
A Final Order at Last
The good news is that it is our understanding that the newly appointed D.C. Insurance Commissioner, Steve Taylor, intends to take action enforcing the law against CareFirst by December 7.
Here’s why this is important to the District and to healthcare in the city.
Last December, the previous Commissioner found that CareFirst’s surplus for the District-based portion of the company was excessive by $268 million. He further found that $56 million of that $268 million was attributable to earnings in the District. He therefore ordered the company to file a plan to dedicate that $56 million to community health reinvestment–as required by the law the Council passed nearly seven years ago. The Commissioner’s order required that CareFirst submit its plan by March 16 of this year.
But CareFirst did not comply with the Commissioner’s order. Worse, CareFirst has urged the Commissioners in Maryland and Virginia to order the company not to comply with the D.C. Commissioner’s order. And CareFirst did that even though Congress itself made clear in the federal charter for the District-based portion of the company that it is the District of Columbia and its Commissioner that have ultimate authority over that company–not Maryland and Virginia.
An Enormous Amount is at Stake
We’re glad that Councilmember Orange is bringing attention to this important issue, and that Commissioner Taylor is working toward a final order in the next few weeks. There is an enormous amount at stake in that order–not only in terms of dollars, but also in terms of enforcing the law here in the District, and in finally bringing CareFirst into compliance with that law. We say that for three reasons.
First, $56 million of excess surplus–at least–hangs in the balance. Given the pressing health needs in the District, those dollars could be and should be used to address any number of concerns, including subsidizing or reducing premiums, supporting healthcare providers, building clinics, or paying for public health education campaigns.
Second, DC Appleseed believes the amount of excess surplus that should be reinvested is actually much larger than the $56 million–but unless and until the Commissioner issues a final order regarding there $56 million, there can be no appeal to the Court of Appeals to determine what the exact amount of excess surplus actually is.
Finally, it is important that laws passed by our local elected officials, decisions issued by our courts, and orders issued by our local government agencies be respected and enforced. Democracy and good government depend on this happening. But so far it has not happened with regard to holding CareFirst accountable to the rule of law and to its obligation to the community as a charitable and benevolent nonprofit.
We are glad that this is going to happen at long last, and we look forward to Commissioner Taylor’s decision.