A $51 Million Rebate for Area Residents

I have some very good news regarding our longstanding efforts to require CareFirst BlueCross BlueShield to spend down its excess surplus.

Yesterday, the D.C. Insurance Commissioner ordered the company to rebate $51 million in excess surplus to the more than 200,000 subscribers with D.C.-based CareFirst contracts. This group is primarily D.C. residents, but it includes a significant number of Maryland and Virginia residents covered under those contracts through D.C.-based employers. The average refund will be more than more than $200 per subscriber, but will vary depending on the level of premiums paid. Under the Commissioner’s order, CareFirst must issue these refunds within 120 days–by December 28.

This is a great victory for the public. It’s been nearly a decade since we urged the D.C. Council to adopt the law requiring the company to dedicate any excess surplus attributable to the District to community healthcare needs, including relief for subscribers. We’re glad that the Commissioner confirmed that under this law, the company’s nearly $1 billion surplus is excessive, and $51 million–at least–must now be returned to the public.

We think this order is not just a victory for D.C. residents. It is also an opportunity for Maryland and Virginia to join the District in holding CareFirst accountable. The D.C. Commissioner determined that most of the company’s excess surplus–$212 million–is attributable to business in those states. Maryland and Virginia officials should now ensure that their residents’ share of the excess is dedicated to healthcare needs in their own jurisdictions, including rebates to their constituents. CareFirst subscribers who live in Maryland and Virginia should call on their public officials to protect their interests, just as D.C. officials have done here in the District.

While the return of $51 million to subscribers is an important development, we think the amount of excess surplus and the portion attributable to the District is much larger than the D.C. Commissioner has found. We’re preparing to go to the D.C. Court of Appeals to make that case. We’re also preparing to counter CareFirst’s efforts to undo or delay the Commissioner’s decision.

In the meantime, we applaud the D.C. Commissioner for taking this critical step toward ensuring that CareFirst fulfills its obligations to the public.

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