Blues Surplus Not Excessive: Pa. Department

“Going forward, we will continue to use our model to keep a proper check on the appropriateness of the Blue Plans surplus levels, a review that will occur as soon as the 2004 numbers are submitted next month,” Koken said.

Still, Denise S. Cesare, president and CEO of Blue Cross of Northeastern Pennsylvania, disagreed strongly with the DOI.

Setting a cap on a companys surplus “is not a remedy for all that ails health care,” Cesare said. “Unfortunately, there is no magic bullet to solve all the serious issues presented in todays health care environment. Capping the surplus will harm the long-term stability of our organization without significantly benefiting those subscribers, communities and constituencies we serve.”

One of the Blues, IBC, said it was pleased that the DOI “gave this important issue a thorough and careful analysis.”

Of all four Blues, IBC fared the best. It was the only one the DOI rated as “Efficient,” meaning it was operating at the low end of the RBC ratio range the DOI rated sufficient.

Reacting angrily to the ruling, a Pittsburgh business group charged that the DOI ignored small employers and workers.

“It is clear that their interests are not an important consideration for the governor or the insurance department,” charged Cliff Shannon, president of the SMC Business Councils. “The administration has abdicated its responsibility compared with other states that have taken steps to restrain prescription drug prices, reform medical malpractice lawsuit abuse, and bring more stability and fairness to the state-regulated health insurance marketplace.”

Reproduced from National Underwriter Edition, February 18, 2005. Copyright 2005 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.