A study of the region's largest health insurance provider concludes that CareFirst BlueCross BlueShield is shirking its mission and legal obligation to support local public health needs, spending a tiny fraction of the at least $40 million it should commit annually.
The study, to be released today by the DC Appleseed Center for Law and Justice, faults the nonprofit CareFirst for directing less than $1.5 million through its District-based affiliate this year to community activities.
CareFirst's president, William L. Jews, says his company's first responsibility must be to policyholders.
(Andrea Bruce Woodall -- The Washington Post)
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Given the affiliate's billion-dollar worth and its federal charter as a "charitable and benevolent institution," this year's contribution "could and should" have been between $40 million and $61 million, according to the center. Neither the company's competitive position nor financial stability would be endangered by the calculation, the report says.
"The company is falling far short of its obligation and is missing huge opportunities to address health care needs in this community," the study says. Local leaders suggest such counter efforts as a regional campaign on diet, exercise and smoking; a comprehensive initiative on mental health problems; and expansion of low-cost health insurance offerings.
The call for significant change, through regulatory oversight if necessary, already is drawing support from key city officials.
"I agree with the basic conclusion," D.C. Insurance Commissioner Lawrence H. Mirel said. "I do not know if the amount Appleseed is talking about is realistic . . . [but] I think they should do more."
D.C. Council member Sharon Ambrose (D-Ward 6), who chairs the Consumer and Regulatory Affairs Committee, would like Mirel and the council to hold hearings on the issues the report raises. "On its face, if you start looking at the numbers, there is a discrepancy between what you'd expect an organization with those revenues to do and what they're setting aside," she said.
CareFirst's president and chief executive, William L. Jews, said in a statement that his company wants "to play a role" in addressing community health problems but noted that the firm's first responsibility must be to policyholders, "being there for them when we are most needed."
The 129-page legal and economic analysis stems from the insurance company's unsuccessful attempt last year to convert from its nonprofit status into a for-profit corporation. DC Appleseed, an advocacy organization that focuses on systemic local problems, organized a coalition of providers and consumers to assess whether such a change would help or harm health care.
When the Maryland insurance commissioner rejected CareFirst's application -- deciding that the proposed sale price significantly undervalued the company and would hurt the public interest -- Appleseed used his denial as a jumping-off point for evaluating whether the nonprofit was living up to its charitable mission.
