Chester Burrell, chief executive of CareFirst BlueCross BlueShield, stood between Gov. Martin O'Malley and a phalanx of Maryland officials yesterday as they touted the company's contribution to help seniors pay for prescription drugs.
After two months as CareFirst's CEO, Burrell is forging a relationship with state leaders that is in stark contrast to the rocky relations between state officials and his predecessor, William L. Jews. Before stepping down in 2006, Jews drew fire from lawmakers and regulators when he attempted to convert CareFirst to a for-profit operation and sell it several years ago.
Burrell says he is committed to CareFirst's status as a not-for-profit entity. Yesterday, the company pledged to help seniors bridge a coverage gap known as the "doughnut hole" in Medicare drug plans with a $7 million-a-year program. Earlier in the week, CareFirst gave $100,000 to Health Care for the Homeless, a nonprofit group.
The company's doughnut-hole pledge "shows that new leadership of that organization understands their role as a nonprofit," said John M. Colmers, the state's health secretary.
As the region's largest insurer, CareFirst has 3.2 million members in Maryland, the District of Columbia and Northern Virginia.
Under the prescription drug plan, an estimated 7,500 lower-income Maryland residents would get subsidies to cover their drug costs when they fall into the coverage gap.
The Medicare drug benefit covers annual prescription costs up to $2,510 and costs above a higher threshold of $5,725, but not those in between, leaving a hole in the middle of the program.
Seniors with chronic conditions, taking two or more drugs a day for hypertension, cholesterol and other problems, are often the ones whose costs are so high that they end up reaching the gap, and have to pay out of pocket, said health economist Marilyn Moon of the American Institutes for Research.
"Those people are most likely to end up in a situation where they will have poor drug coverage, and they are the ones in particular that you want taking those drugs because they are preventative measures," Moon explained.
The subsidy, funded by CareFirst and provided through a state program, would cover seniors with incomes including Social Security benefits and retirement plans up to 300 percent of the federal poverty level, or about $42,000 for a couple.
The amount of the subsidy would depend on the extent of their drug costs that aren't covered.
Burrell said that CareFirst earns an exemption on premium taxes that other insurers have to pay in Maryland because of the company's public works. But he emphasized the company's reinvigorated mission to make health care more affordable and accessible.
"Our whole goal is to reach as many people as possible and get them the health care they need," he said.
Lawmakers said passage of a bill locking in CareFirst's nonprofit status, shortly after regulators blocked the company's sale in 2003, paved the way for its expanded community role.
laura.smitherman@baltsun.com