CareFirst confusion giving you the blues? Here's help


BE HONEST: You don't get it when they start talking about the CareFirst BlueCross BlueShield proposal to become a profit-making corporation. You don't even know why you should get it.

You need Bobby Neall - state Sen. Robert R. Neall, an Anne Arundel Democrat who enjoys putting important, complex issues in simple terms and making you laugh in the bargain.

Mr. Neall says conversion as proposed amounts to the arrival of a moving van and movers who start putting your furniture in their truck. You're bewildered. You didn't call the movers.

It gets worse. Your neighbor comes by to say he forgot to tell you about selling your house.

You sold my house?

Yes, he says, I sold it, and I got a lousy price - and you're going to pay a really outrageous commission. But it's going to be good for you in the long run. Trust me.

That's basically what's happening in the conversion proposal, Senator Neall says.

The forced-sale analogy gets your attention at least. And that's good, because the proposal is now pending before various governmental entities, including the state insurance commissioner and the General Assembly.

Mr. Neall and others, including Gov. Parris N. Glendening, say the deal doesn't work for Marylanders. We're not sure we want to sell, in other words, and the advertised price seems way low.

Growing opposition generated by Senator Neall and others probably means the conversion won't happen. Two other states and the District of Columbia would have to agree along with Maryland, posing a set of hurdles that could take years to clear in the best of circumstances. If the public actually begins to understand, Mr. Neall says, that will create the ultimate high hurdle.

Arguing for conversion is William L. Jews, CEO of CareFirst. He's out on the hustings right now trying to educate the insurance commissioner and various legislative committees.

He says converting and then selling to a big national corporation would insulate the local Blues from strong and uncontrollable market forces.

"I think people just don't understand," he said last week in Annapolis. If the company was sold and became part of a California company called WellPoint Health Networks, Mr. Jews says, the Maryland plan would have access to capital, leverage in the marketplace and economies of scale. If you don't really understand all of that either, Mr. Jews says he'll be working hard in the next few weeks to make it clear.

He and Senator Neall would agree on this: Under his leadership, the company has grown into a relatively lean and efficient operation - not the case when he took over. It has a cash account of $600 million (some say $800 million) - enough, says Senator Neall, a former banker, that an ordinary Marylander might be able to get a bank loan to buy it.

"This is a bride dressed up to be given away," says Senator Neall. The bride's gown was purchased, he adds, by Maryland taxpayers.

Speaking now - unwilling as always to hold his peace - Senator Neall will be trying to take the shotgun out of this ceremony.

He plans to oppose the conversion with a handful of bills that would make the sale harder or impossible. Each bill has a real purpose, but they're laid on the table to counter the educational campaign of Mr. Jews. (A debate between the two men would be swell.)

The senator begins his tutorial by observing that CareFirst is a state-chartered company. The company is the house in Senator Neall's sold-yours-for-cheap analogy. The people of Maryland are the owners. The company's staff and board of directors are the renters. They don't own the company.

One of the Neall bills would require CareFirst to demonstrate that its conversion is actually in the state's best interest. Under existing law, the insurance commissioner can stop the transaction if he rules it is not in the state's interest. The Neall measure shifts the burden of proof to the company.

Another bill calls for an audit of the company's books. It would begin by asking whether money given to the company in the form of discounts was used for the designated purposes. If not, the funds would revert to the state treasury.

A more friendly measure would provide access to the capital Mr. Jews says the company needs for computers and the like.

Should the company actually convince the commissioner and the assembly that conversion makes sense, another Neall proposal would reclaim the Blue Cross Blue Shield brand name.

Here's where the senator begins to get steamed. "If we're going to sell," he says, "we're going to set the conditions."

Senator Neall hopes a lively debate - and his anti-conversion legislation - will keep the CareFirst house in place so that it can be improved.

If the company were to change its identity from nonprofit, he says, it would have to be reinvented, and he believes the cost would be exorbitant and unnecessary.

The house would have to be rebuilt and refurnished, he says, and there wouldn't be enough money.

C. Fraser Smith is an editorial writer for The Sun.

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