Maryland Insurance

For nearly half a century, Blue Cross Blue Shield, and appreciated the reputation of a well-managed non-profit service network as the nation’s largest source of private health insurance.

But in recent weeks, investigators federal and state authorities, not indications of questionable business practices. They range from the destruction of outstanding claims and the creation of fictitious rules for the creation of affiliates of State without the approval and payment of wages and pensions amounted better leaders of plans that are nearly insolvent.

The regulatory authorities and other experts say that these practices are partly responsible for the serious financial problems faced at least a dozen of the nation’s Blue Cross and Blue Shield plans. The 73-plans, at least one in each state, covering about one third of Americans with private health insurance. 15 surveillance plans

R. Tresnowski Bernard, president of the National Blue Cross and Blue Shield Association, said 15 shots were established on a watch list “because they do not meet our standards of financial reserves. He refused to identify them .

Senator Sam Nunn, the Georgia Democrat, head of the Permanent Subcommittee of the Senate for investigations, from research in the network, estimated that at least 20 of these plans have financial problems, as measured by the association its own standards.

Blue Cross and Blue Shield officials emphasize that their plans are close to insolvency, but if a plan collapse, as in the west of Virginia during the years 1990, subscribers, you can without insurance, at least temporarily.

Blue Cross and Blue Shield plans are distinguished by other insurers, because all the surpluses, after payment of claims and costs must fallow land reserves for the financing of future rights. As a non-profit operations, it is not issued storage or pay dividends. They were adopted by the Federal taxes until 1986, but Congress repealed the release, after finding that many behave like insurance companies for profit.

In an interview, “said Tresnowski state regulatory authorities were partly responsible for the problems of the Blue Cross and Blue Shield plans. Under political pressure, he says, they are often denied to increase the construction of the company retains. He added that in many countries, commercial insurers skimmed healthy young clients, and Blue Cross Blue Shield and high-risk train payer.

But the governmental regulatory authorities say most of the problems of Blue Cross Blue Shield, and resulting efforts to branch into commercial enterprises in which they have little experience. These initiatives are the result of the struggle for survival in a highly competitive market of health.

In Washington, Blue Cross Blue Shield and the National Capital Area, which provides 1.1 million people, has 37 subsidiaries, including an agency of life insurance and companies in other countries. Barbara A. Exstrum, a spokesman for the plan, “said daughter companies, which together has never been a profit.

The Maryland insurance commissioner, John A. Donaho, said that part of non-commercial subsidiaries of Blue Cross and Blue Shield of Maryland, without his knowledge or approval, had “not scary”.

Carl J. Sardegna, president of Maryland, acknowledged that some of its subsidiaries had lost money, but insisted that the company was “working hard to comply with its obligations.” Insurance Group is impatient

The National Association of Insurance Commissioners, composed of officials from all 50 states, has a committee for evaluating the creditworthiness of Blue Cross Blue Shield plans and the adequacy of regulation.

The Blue Shield plans in Buffalo and Albany, which used to 439000 subscribers in Upstate New York, recognize that significant financial problems. Under an agreement with the state, its parent company, Corporation, the Health Insurance Whole Network, now have more financial means August 1

Mary Ellen Hager, Senior Vice President of Whole Health, said: “Our debt exceeds our assets of $ 25 million. We have no reservations.” She added, “but we continue to pay on time, and there is no reason to panic.