A Keep InforM.D. Company
CareFirst Conversion to For-Profit

Click here for Maryland Legislative Updates 2004 Seminar

NEW!!!!
Track the bills in the General Assembly concerning CareFirst !!

Many bills have been filed (and many more will be filed) regarding the CareFirst conversion to for profit status. This issue is very heated.  You can now check the status of all of the bills by clicking here. Be sure to read the BILL and not just the SYNOPSIS of the bill. Many times the bill doesn’t do what you think it will do.

One of the more explosive issues in this year’s legislature is the conversion of CareFirst (Blue Cross Blue Shield of Maryland) from a non-profit “insurer of last resort” to a for-profit company. This is fast becoming an emotional issue for all concerned. Informational hearings have been held (January 22, 2002 in Economic Matters and Appropriations Committees) and were at times aggressive.

Several bills have been introduced in the early part of session to deal with several issues.

  1. House Bill 2 - changes the burden of proof TO CareFirst to show why the conversion is in the best interest of Marylanders. Current law (passed in the 2001 General Assembly in anticipation of CareFirst filing for conversion this year) puts the onus on the Maryland Insurance Commissioner. You may read the bill here. Fran Doherty (CareFirst lobbyist) announced in a briefing on January 22, 2002 that CareFirst would not oppose this bill.
  2. House Bill 141 - is an attempt to stem the “golden parachutes” that CareFirst executives will receive if the conversion is acceptable. You may read the bill here.
  3. Senate Bill 90 - would require the Insurance Commissioner to consult with the Secretary of DHMH should sny HMO desire to sell to a foreign corporation. NOTE: A foreign corporation means a business not headquartered in MARYLAND. You may read the bill here.

Maryland taxpayers have subsidized CareFirst / BCBSMD since its inception through tax breaks due to its status as “insurer of last resort” under the SAAC agreement.  In addition to those subsidies, CareFirst has also had benefit of the following:

  • Exemption from paying Maryland’s 2% premium tax on all premiums collected.
  • A 4% discount on payment to Maryland Hospitals under the SAAC agreement (Separate Acceptable and Affordable Coverage).
  • An additional 1% HMO discount to Maryland Hospitals
  • An additional 1% “prompt pay” HMO discount for payment within 30 days.

We have compiled many documents relative to CareFirst and their filing for conversion and more documents are being addded weekly. To go to the documents page click here.