Blue Cross Blue Shield of Montana is in the process of merging with Health Care Service Corporation. According to state law, when an insurance company sells its assets like this, its reserve account must be used to create a non-profit foundation.
Think of the reserve account like a bank account. Policy holders pay a health insurance premium and a portion of it gets set aside in case the insurance company needs to pay a claim. The money is invested and earns interest. For Blue Cross, its reserve account is sitting at about $120 million. So if the merger is approved, $120 million will be used to create a non-profit organization, and this has piqued the interest of many people in the world of health care.
Jim Edwards and Richard Miltenberger broker health insurance plans for over 40,000 Blue Cross Blue Shield customers and they have launched a “Please Give the Money Back” campaign. “We represent businesses and individuals who buy health insurance, so watching that process all through the years. We just think it’s patently unfair for the money to go anywhere else than to the people who put it there, the policy holders, the people who paid it in. They believe by giving the money back to the people who paid it, it will be an economic shot in the arm,” said Miltenberger.
“If this money were to go back to small businesses there is just a myriad of opportunities for them: conceivably adding people, remodeling, upgrading computer systems. There (are) a million needs,” said Edwards.
Spokesperson for the merger John MacDonald points out Blue Cross and HCSC will not have a say in how the money is spent and that this decision will be left up to Attorney General Tim Fox. If the merger is approved, the state will schedule a public hearing on how to spend the money. And with $120 million on the table there will likely be quite a few people coming up with ways to spend it.
The merger is pending approval from the Commissioner of Securities and Insurance Monica Lindeen and Attorney General Tim Fox.
May 16th, 2013