Blue Cross & Blue Shield of Rhode Island may have unwittingly given a boost to an idea proposed by a health care task force, to establish a full-time, independent Insurance Commissioner.
That individual, under legislation proposed in the House by Rep. Joanne Giannini, a Providence Democrat, would have the authority, when reviewing rate increases, to consider the administrative expenses and reserve levels of insurance companies.
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Two-thirds of states across the country have such an individual. We think it’s time for Rhode Island to join the trend.
There is also talk of giving the state Department of Business Regulation more statutory authority in regulating health insurers. Rep. Brian Patrick Kennedy wrote to DBR officials after attending a House Corporations Committee hearing.
“Whatever powers the Department of Business Regulation needs, we’re willing to consider enabling them,” he said. “As a nonprofit corporation, Blue Cross & Blue Shield needs to be held accountable to its customers and we’re willing to put those accountability measures into law…”
Blue Cross has brought this added scrutiny on itself.
As we have reported, Blue Cross has accumulated massive reserves, while at the same time pushing double-digit rate increases on to business owners.
Making matters worse have been published reports of what may best be described as exhorbinate spending habits at the insurer, including a board of directors decision to forgive a $600,000 loan to the company’s President and CEO Ronald A. Battista. The company has also been criticized for its planning sessions.
“These expenses are shameless,” said Secretary of State Matt Brown, who last October put together the task force that ultimately recommended that the Insurance Commissioner position be created. “These are our premium dollars paying for luxury resort expenses … while small businesses struggle to provide health care to their employees.”
You would like to think that in the wake of these issues, Blue Cross would demonstrate some sort of humility.
Not a chance.
Battista has agreed to pay back $340,000 of the loan, but that decision came only after it was obvious the public outcry was not about to subside. The insurer was also quick to hire a Boston public relations firm, Nicolazzo & Associates, that specializes in crisis communications.
We suspect that Nicolazzo & Associates is very good at what it does – and probably commands top dollar.
But here’s some free advice. We would strongly suggest that Blue Cross stop paying the members of its board of directors.
We can’t imagine that the prominent Rhode Islanders who make up the board are there for the money. Surely, Blue Cross can fill a talented board with individuals whose primary goal is to steer the insurer in the right direction and do whatever possible to improve the company’s economic standing – and reputation – here.
The next chapter in the Blue Cross saga may be the insurer’s decision to either remain in downtown Providence – or move to a suburban location.
We’d like to see Blue Cross stay in Providence. By demonstrating a commitment to the capital city and retaining its employee base here, Blue Cross would be adding a positive chapter to its saga.
Officials at Blue Cross should not need a “crisis communications” firm to tell them that would be a good idea right about now.
