Causey: “The gloves are off.”
“I’ve worked well with these guys – at least – since 2017. And now the gloves are off.”
That’s NC Insurance Commissioner Mike Causey on the current state of his professional relationship with Blue Cross North Carolina. Low-key discussions in Raleigh’s halls of power have escalated dramatically into highly-visible hardball power politics:
For 90 years, Blue Cross NC has been a constant in the state: the largest health insurance provider across all 100 counties, a ubiquitous advertising and philanthropy presence, and one of the most influential political actors in the state.
Now, after a high-profile contract loss this winter, the nonprofit health insurance carrier is asking lawmakers for a serious and potentially far-reaching change to state regulations so that it can behave more like national for-profit competitors.
On Monday, North Carolina Insurance Commissioner Mike Causey came out swinging against the bill, taking a fight that has been brewing inside the General Assembly this spring to the broader public.
“I think that this legislation is missing many provisions that’s necessary to protect the people, the policyholders,” Causey said. “[It] does not provide for a meaningful review of reorganization.” […]
We’re hearing reports about legislators being told rather menacingly by leadership to “shut your mouth and vote YES.” We’re hearing about Blue Cross NC dispatching an army of lobbyists to flood legislative campaign war chests with big dollars. We’re also hearing about charities that receive funding from Blue Cross being pressured into lobbying the legislature to approve the regulation changes.
Why is so much energy being expended on one piece of legislation that clearly benefits ONE particular company (that happens to hand out a lot of campaign contributions)? What is the end game here?
Current industry regulations require insurance companies like Blue Cross to give rebates to customers when the companies’ reserves hit a certain threshold. Causey told us that Blue Cross is close to hitting that mark, and suggested that the company is trying to rush this change through the legislature to avoid having to give rebates to its customers.
One of the most repeated arguments by bill proponents is that its passage would help Blue Cross be “more competitive.” According to the state Department of Insurance, in 2021, Blue Cross had 83 percent of the state’s personal health insurance market and 79.6 percent of the state’s group comprehensive health insurance market. It sounds like they’re already pretty darn competitive.
I always thought a company’s performance, its business model, and market forces themselves determined how “competitive” a company will be — and not government “help.” With a GOP supermajority in the legislature, I would have thought that would be the overwhelming majority view in Raleigh. *Silly me.*
[…] Proponents argue it would level the playing field, but skeptics say a lack of transparency could bring serious uncertainty for the more than 4 million North Carolinians whose insurance cards bear the name “Blue Cross Blue Shield of North Carolina.”
“Under today’s corporate structure, they can’t move fast and in the world of business, you have to be able to move fast when it comes to opportunities,” Rep. John Bradford, a Republican from Cornelius and lead sponsor of a bill to make the changes, told the House Health Committee in late March. He argued that the increased regulatory hoops the company has to jump through as a nonprofit slows it down.
Executives, lobbyists, and spokespeople for the insurer, which has $7.7 billion in assets (including $4.5 billion in reserves), maintain that for the most part, nothing would change for consumers. They emphasize that the move would allow the company to be more “nimble,” “flexible,” and “competitive.” The company is undertaking a full-court press at the legislature, with 14 lobbyists working to make the case for House Bill 346.
[…] Introduced in mid-March, the bill would allow the company to create a nonprofit parent holding company for Blue Cross NC and any other for-profit subsidiaries. That holding company—essentially a shell company with the same executive team as the insurance entity—could take money built up by the company’s insurance business and “use that money, basically, however, they want to use it,” said Jackie Obusek, the chief deputy commissioner of the state Department of Insurance.
“Even with simple corporate transactions, the devil’s in the details,” Causey said during his press conference. “With this bill, the devil’s in the lack of details.”
He also expressed his belief that if the bill were to pass, it would raise premiums for North Carolina policyholders.
Blue Cross NC says they’ll use the money to purchase companies that can improve the services they offer policyholders. But such purchases would come with almost none of the regulatory oversight the company currently receives from the state Department of Insurance. And Blue Cross NC has been vague about the companies that it would buy.[…]
Jones Street politicians appear to be falling all over themselves to sponsor the Blue Cross bill. But the voters are also giving them a little food for thought:
The House bill has 56 sponsors, out of a total of 120 members. Thirty-six state senators out of 50 have sponsored an identical bill filed in that chamber. The House bill is scheduled to be discussed in the House Health Committee, where lawmakers will get a look at a bill that’s been heavily marked up since it was first introduced in late March.
Health care advocates, some key legislators and Causey remain skeptical, even of the amended bill. In interviews, lawmakers, health economists, and attorneys all questioned Blue Cross NC’s stated intentions.They stressed their belief that restructuring would bring harm and not benefit the taxpayers and premium payers who funded the company for decades.
House Health co-chair Rep. Donna White, a Republican from Johnston County, spoke after Causey at his press conference and said her phone has “absolutely burned up” with people contacting her to oppose the bill.
Another skeptic is Rep. Donny Lambeth, a Republican from Winston-Salem, co-chair of the House Health Committee, and a retired hospital president.
“‘Look, guys, you’re big. You’ve done a lot of good things in North Carolina, but people are concerned with your size and what you’re up to,’” Lambeth said he told the company’s lobbyists. “You’ve got to be able to answer what is it that you’re up to. Because people don’t trust Blue Cross. I’m just laying it out flat.”[…]
The state House gave Blue Cross exactly what they wanted today with an overwhelming vote of approval for the legislation. The NO votes came primarily from a coalition of Freedom Caucus members and the more liberal members of the House.
Now, it’s up to the Senate — where it appears Blue Cross has the votes it needs already lined up.
If there are no amendments passed by the Senate, the bill goes to the governor. I talked with some opponents of the legislation today. They suggest that citizens concerned about the legislation call their senators, the Senate leadership, AND the governor.
Commissioner Causey told me today that his office is “reviewing all our options” in the event that the legislation passes the General Assembly and wins approval from Cooper.
7 thoughts on “Causey: “The gloves are off.””
Causey and Folwell, only TWO that EVER look at the citizens and their constituents.
Like many bills before, the GA will give BCBS whatever they desire/want in return for $$$ to satisfy their greed. NC GA is akin to those sitting on capitol hill. ALL driven by greed…power, control. The almighty $$ has corrupted every politician in this country. And NC has followed their big brothers/big sisters in DC…
ONE BIG CORRUPT COUNTRY.
NC is has the best: FOLWELL and CAUSEY
Hopefully we will see Folwell as our next governor, but I am concerned with replacing him as Treasurer. John Bradford is the only name out there so far and he is an obnoxious Big Government liberal who panders to the special interests. Bradford is totally unacceptable, and if he is the nominee, many conservatives will simply skip that race. We simply have to do better. Bradford would run the Treasurer’s office like he has his legislative office, as a flunky for the special interests.
does Folwell have anyone in mind for treasurer? does Folwell have a deputy in lock step with him who is willing to run for treasurer?
This is the second Republican statewide office holder fed up with and calling out the leaders medical “non-profits” and the leaders of the NC General Assembly for their collision and corruption.
Good to see men with integrity standing up for the people of NC.
Disappointed in John. Lambeth has always been a sell out to Big Pharma, Hospitals, and Insurance. Follow the money. Way past time to replace Moore and Berger. They have been in a position of power for far too long.
HERE IS BACK ROOM BUZZ Hardister, Moss and Bradford are going to be double Bunker or squeeze out of their seats. Hardister and Mosd HAS NO Labor Law or OSHA experience. Josh Dobson told friends he was leaving cause he didn’t understand Labor Requirements and battle with DC on regulation..
AS FOR BRADFORD. he going to be pushed out for Cotham designed seat. HE DONE NOTHING but look “Pretty ” He Screwed business partners in past AND WILL BET HE WILL MESS UP MY STATE PENSION.. SAD..All the good FOLWELL DONE..GONE….
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