State legislative leaders said yesterday they haven't decided whether to support a last-minute request by Blue Cross and Blue Shield of Maryland for legislation to convert from a nonprofit to a for-profit company and sell stock.
"It's too early to tell," House Speaker Casper R. Taylor Jr. said yesterday about his meeting Tuesday night with company officials.
Mr. Taylor and Senate President Thomas V. Mike Miller Jr. said they're waiting for more details of the proposed legislation and will meet tomorrow with company officials, who are working with state Insurance Commissioner Dwight K. Bartlett III on the proposal.
Blue Cross, the state's largest health insurer, is running out of legislative time: The General Assembly session ends April 10.
"Apparently the Blues and the commissioner are trying to work it so the controversial issues are dealt with," Mr. Taylor said, adding he didn't know details of the proposed legislation.
Neither Mr. Bartlett nor Blue Cross will publicly discuss precisely how the company would convert to a for-profit corporation after 58 years of operation as a nonprofit.
The legislation would have to address such potentially controversial issues as the company's current nonprofit tax exemptions, which save Blue Cross $12 million a year in state premium taxes, and possible stock options Blue Cross officials would receive if the company sells stock to investors.
Stock options would enable executives to buy shares at a pre-set price, a highly lucrative arrangement if the stock price rises after the company goes public.
Two months ago, Mr. Bartlett rejected a Blue Cross proposal to reorganize and create a for-profit subsidiary that would sell stock.
The commissioner said he agrees the company needs to raise capital to improve its finances and competitive position, but he said the proposal submitted to him late last year violated state law governing Blue Cross. The legislation under discussion now would change the law.
Even if Mr. Bartlett agrees to support Blue Cross legislation, Blue Cross could face opposition from doctors, consumer groups and others who opposed the proposal rejected in January. Critics charged that Blue Cross would become more interested in serving stockholders' interests than subscribers' needs.