You may have seen the Washington Post report last week on the District’s persisting racial and geographic disparities in healthcare access and health outcomes. For example, chronic diseases and depression are highest in Ward 8, and less than a quarter of residents in the District’s east end see a primary care provider in their own zip code.
Dramatically increasing investments to reduce such disparities has been a key purpose from the beginning of our efforts to hold CareFirst BlueCross BlueShield accountable to its nonprofit mission. And now, at long last, the D.C. Insurance Commissioner is on the verge of making a decision that can advance that purpose. Specifically, he must now decide what the company needs to do with its $51 million in excess surplus that it owes to the District–an amount the Commissioner has already determined must be dedicated to community health reinvestment.
Here’s how we got to this point. For nearly a year, the Commissioner and the company were in settlement negotiations after the Commissioner had ordered the company to spend down the $51 million. The Commissioner then invited DC Appleseed to join the negotiations. After that, the Commissioner rejected the company’s settlement proposal, increasing the amount the company should pay and accepting our recommendations for settlement provisions that would be required to make sure the company complies with its obligations. Finally, on September 1, CareFirst announced that it was rejecting the Commissioner’s proposal and would instead pursue its legal options.
It’s unfortunate that the company has avoided returning any money to the public over the past year. But the Commissioner now has a clear path to ensuring that millions of dollars are finally reinvested. In our letter to him last week, we suggested how he should do that.
- He should reject CareFirst’s request to stay the requirement to spend money pending appeal to the D.C. Court of Appeals. The agency has already denied a stay of the excess surplus determination, and the fact that the company is at last being required to actually spend money shouldn’t change that.
- In our initial report on CareFirst in 2004, we noted that “[t]he need for greater capacity to deliver healthcare to uninsured and underserved population throughout the region is apparent.” The Commissioner, CareFirst, and the D.C. Office of the Attorney General have all agreed that this is the best use of the money, since grants to nonprofit service providers were central to all parties’ settlement proposals. In fact, the Commissioner has specifically proposed that the money go to initiatives consistent with the District’s DC Health People 2020 Framework, which is based on “best practices, social determinants of health, and health equity.”
- The $51 million should be increased to reflect interest accrued on the excess surplus. The excess dates to 2011. There’s no reason CareFirst should profit from the surplus review taking much, much longer than the law contemplated, particularly since much of the delay was caused by the company itself.
- The $51 million needs to be spent at once, and certainly faster than 10 years, as the company and the Commissioner had proposed earlier. If the payout period is longer than a year, the annual expenditure should be increased so that the reinvestment maintains its present value.
DC Appleseed plans to appeal the Commissioner’s order once he issues it, since we believe that closer to $300 million needs to be reinvested in the District–and $200 million more throughout the entire region. But the Commissioner should avoid further delay by promptly requiring CareFirst to dedicate the first $51 million to initiatives targeted to the city’s health disparities.
The Commissioner finally has the opportunity to require CareFirst to start meeting its obligations to invest in better health in the District. We hope he acts promptly.