Provider, Doctors May Pull Out of Program

By Nikita Stewart
Washington Post Staff Writer
Tuesday, May 6, 2008

A proposal to mandate health-care coverage for all District residents -- the city's version of universal health care -- may not be mandated or universal at all. And the region's largest private health-care provider may pull its planned $5 million annual contribution and its doctors network out of the deal.

D.C. Council member David A. Catania (I-At Large) said yesterday that he is retooling his Healthy DC legislation after deciding that the city could sign up the estimated 45,000 affected residents by reaching out to them rather than assessing the $250 fine he initially proposed.

He also said that CareFirst BlueCross BlueShield, which would have entered into a contract with the city to carry out the program, has been indecisive. "CareFirst has had -- the best way to characterize it -- a change of heart," he said at a council briefing.

Catania said in an interview that the health-care company has not told him directly that it is pulling out. "There is less enthusiasm there," he said.

"It's very hard to nail them down," he said. "I'm just not interested in playing games."

The legislation will now be worded to authorize D.C. Mayor Adrian M. Fenty (D) to seek a provider, Catania said, adding that CareFirst could negotiate again with the city.

Health-care advocates and representatives of health maintenance organizations criticized the legislation last week for allowing the city to enter into a no-bid contract with CareFirst. Catania said the arrangement was being made to expedite the program, which would begin in July 2009. Catania expects to attach the Healthy DC bill to the 2009 fiscal budget, which the council will consider May 13.

CareFirst spokesman Michael Sullivan responded yesterday to a request for comment with the one-page statement the company had submitted to the health committee Friday during a public hearing on the bill. In the statement, the company explains pros and cons of the plan, including the chance that the city could be burdened with a program it cannot afford.

The company urged the council to "exercise caution and employ all of the evaluative processes necessary to create a viable and financially stable program."

Under the initial $50 million proposal, the city, CareFirst and several other revenue sources would have been used to fund the program. The city would have offered a $21 million subsidy, and CareFirst would have provided $5 million. Other revenue would have been raised by doubling the tax on cigarettes to $2, creating a 2 percent premium tax on HMOs and increasing the tax on commercial health-care premiums by 0.3 percent. Revenue also would have come from fines.

Uninsured residents would have been identified from income tax forms, on which filers would have to say whether they had health coverage. At the hearing Friday, health-care advocates questioned penalizing low-income residents who do not have insurance because they cannot afford it.

The city has the DC Healthcare Alliance, an insurance program for residents who are not eligible for public assistance, such as Medicaid and Medicare. To qualify, an individual must earn no more than $21,000 annually.

The Healthy DC program is designed to also serve those who make more than $21,000 but lack the funds to pay for private insurance. CareFirst estimated the number of those participants at 22,000. Catania said that without CareFirst's participation and with other changes to the bill, that number could drop to 15,000.

Walter Smith, executive director of the public advocacy group D.C. Appleseed Center for Law and Justice, said one must read between the lines when interpreting CareFirst's testimony. "They do not want to bear any risks," he said.

Appleseed, which has been studying CareFirst for several years, contends that the federally chartered nonprofit is legally bound to contribute to the community.

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