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Sale of CareFirst is discussed at public hearing

February 14, 2002

Sale of CareFirst is discussed at public hearing



By DAN KULIN
dank@herald-mail.com


A Wednesday night public hearing on a request to make CareFirst BlueCross Blue Shield a for-profit company that would be sold to a California company drew about 75 people to Hagerstown Community College.

Most who spoke during the early portion of the hearing said CareFirst should remain a nonprofit company. Many said they worried about how insurance premiums, service and concerns for turning a profit would affect CareFirst customers.

Donald Battista, president of the Garrett County (Md.) Memorial Hospital, said the proposed sale threatens health insurance for residents of his rural county, where residents already have few choices of hospitals and doctors.

CareFirst, the largest health insurance provider in Washington County with 32,000 customers, would be sold to WellPoint for $1.3 billion, under CareFirst's proposal.

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For the deal to be approved, it has to be reviewed by Maryland Insurance Commissioner Steven Larsen and the Maryland Attorney General's Office, along with officials in Delaware, D.C. and Virginia.

A CareFirst representative speaking at the Wednesday hearing said there are many misconceptions about the proposed sale.

He said CareFirst can't compete with the national insurance companies, and CareFirst officials chose WellPoint for several reasons.

WellPoint also uses BlueCross BlueShield, he said.

WellPoint would improve service, offer better prescription coverage and a wider range of insurance plans, he said.

He said insurance premiums will increase, but with WellPoint those increases will be less than without the sale.

The Maryland Hospital Association president said WellPoint has a record of high administrative costs and many customer complaints.

Former state Delegate Peter Callas said he opposes the sale and questioned where the $1.3 billion from the sale of CareFirst would go.

Some of the money would go to Maryland, but Callas wondered how Maryland's portion would be spent.

Washington County Hospital President and CEO James Hamill, who chaired an association task force that examined the proposed sale, said the sale should not go through. CareFirst should be required to act as the insurer of last resort, a role they have been moving away from in recent years, he said.

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