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Credibility for Blue Cross

RALEIGH — Brad Wilson must have known he had a problem.

Those realizations tend to occur when state legislators take very public swipes at the multibillion business enterprise you head.

Wilson has been the CEO of Blue Cross Blue Shield of North Carolina for less than a year. He took the top job at the state’s largest health insurer as it came under fire on any number of fronts.

Attempting to shape the debate on national health care reform, Blue Cross took hits from legislators angry about mailers and robocalls that ran afoul of the law. The company paid a $95,000 fine for the robocalls, which violated Do Not Call registry rules.

It wasn’t enough. Legislators condemned the use of premium dollars for the effort.

Scrutiny of the lobbying effort came not long after a state audit and public reports questioned whether taxpayers got a bad deal on the contract awarded to Blue Cross to administer the state employee health plan.

State employee groups responded by picketing the company’s office, blaming the insurer rather than rising health care costs for benefits cuts and plan shortfalls in the hundreds of millions.

Allegations of improper conduct by a Blue Cross lobbyist, ultimately unsubstantiated by a State Bureau of Investigation probe, amounted to another public relations hit for the not-for-profit company.

Against that backdrop, Wilson recently announced that the insurer would refund $155.8 million to 215,000 policyholders in the state. The size of the refund will amount to better than a month and a half of premium payments for some customers.

For a customer paying an average of $380 a month, the refund will be about $690.

The company also announced that rates for individual policyholders will go up slightly less than the amount previously announced, saving customers another $14.5 million.

The refund and reduction were announced as part of an agreement with Insurance Commissioner Wayne Goodwin and made possible by changes caused by national health care reform.

Blue Cross explained that the health care reform law phases out certain types of policies by 2014, meaning that reserves needed to cover costs for the lifetime of those policies can instead be distributed.

But making something possible and requiring it are two different things.

Wilson pretty much admitted as much.

“We’re in a time of dramatic change, and as we work through this change together, it’s important that we have credibility,” he said during the announcement.

Blue Cross was a company in search of a public relations boost.

The refund doesn’t directly affect the state employee health plan and its members. But it may signal that company executives recognize that if they want to keep the state’s business in the future they’ll need to be a bit fairer with taxpayers and health plan members.

Over the past few months, Wilson has been privately meeting with legislators and other top state leaders.

Judging from the latest development, the message of those meetings seems to be: We’re going to do better.

Scott Mooneyham writes about North Carolina politics for the Capitol Press Association.

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