The D.C. Council Sets a Deadline for Holding CareFirst Accountable

As you know, it’s been more than a year since CareFirst BlueCross BlueShield failed to file a plan for spending $56 million of its excess surplus on community health needs–as required by District law and the order of the D.C. Department Insurance, Securities and Banking (DISB).

Responding to this delay, yesterday the D.C. Council unanimously adopted an emergency resolution calling on the DISB to at long last to hold the company accountable and require implementation of a plan to spend down the $56 million.

Specifically, the Council’s resolution calls for the following action on the following strict timetable:

  • Within 20 days, the DISB is to publish a notice calling for public comment on how the $56 million should be spent;
  • The notice will give 30 days for the public to make recommendations concerning the best way to spend the $56 million;
  • Within 45 days after the comment period, the DISB will issue its plan for the spending of the $56 million; and
  • The DISB will order CareFirst to implement the plan within 30 days after the plan is issued.

DC Appleseed applauds this action by a unanimous D.C. Council. In several recent hearings, Councilmember Vincent Orange and other Councilmembers have pressed the DISB on the status of the spending of the company’s excess surplus. On February 29, Councilmember Orange told the DISB it was a “no brainer” that it should make sure that the company reinvests the $56 million. But, since the DISB has not yet acted, yesterday Councilmember Orange urged his colleagues to “speak with one voice on this” through the emergency resolution.

As the resolution suggests, the continued delay is becoming increasingly difficult to understand. It has been more than seven years since the Council intended to hold CareFirst accountable to its public mission by adopting a law requiring the DISB to order any excess surplus be dedicated to community health reinvestment. It’s been nearly four years since the D.C. Court of Appeals remanded the DISB’s initial flawed determination upholding the company’s surplus. And it’s been more than a year since the DISB determined that CareFirst’s 2011 surplus was excessive by $268 million and that the company must submit a plan for dedicating $56 million of that excess attributable to the District to community health reinvestment.

The resolution also suggests that the delay has undermined both the rule of law and D.C. Home Rule. Concern over this issue was echoed by Mayor Bowser in her budget presentation yesterday; she acknowledged that CareFirst has lobbied Congress, Maryland, and Virginia to change the law to make it more difficult for the District to regulate the company. In fact, in December, Congress amended CareFirst’s charter to prohibit it from reinvesting excess surplus for years after 2011 without the unanimous agreement of the District, Maryland, and Virginia.

Fortunately, as Congresswoman Eleanor Holmes Norton, and now the Council, have recognized, Congress explicitly exempted the pending 2011 review from that requirement. That means the DISB has full authority to make sure now that CareFirst dedicates $56 million in excess surplus to community health reinvestment.

The Council has made clear that it expects its laws to be implemented and that CareFirst will be held accountable. It’s time for the DISB to make that happen.

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