Blue Cross policyholders were very critical of the company at a recent public hearing in Los Angeles. Over 100 people commented on the company’s operations since its parent company was taken over.

The controversy

The California Department of Managed Health Care (DMHC) called a meeting on August 8th 2007 to gather information about whether Blue Cross violated promises it made to the state in order to proceed with a merger between Blue Cross’ parent company, Well Point, Inc. and Anthem, Inc. in 2004.

According to reports, the new company, now known as Well Point Inc. and the nation’s largest insurer, promised not to transfer over 79 percent of its California business operating income out of the state – yet it transferred $518 M in 2005, $537 M and a whopping $950 in the first three months of 2007 alone. The company also promised not to finance the transaction by increasing premiums – something that many policyholders are also now questioning.

Good and bad comments

Policyholders, who gathered in a standing-room only venue, had both good and bad comments about the company. Many complained about their skyrocketing premiums, canceled policies, physician reimbursement and pointed to thousands of complaints filed against the company in the past three years. The DMHC published several of the comments from the hearing, including the following:

• Although I am a physician, I am increasingly frustrated and powerless to cope with Blue Cross’ denial of just about each and every medical bill incurred by myself or my wife. How much more painful and frustrating must it be for individuals without a medical background who must struggle with mean-spirited corporation?
• It is unfair to the consumer to have to bridge the gap with additional out-of-pocket expenses and it is unfair that Blue Cross can make obscene amounts of profit at the expense of subscribers.

While the majority of the comments by policyholders were critical of Blue Cross, others were more favorable and included instances of the company providing care to the poor and some comments of desperation that citizens would be left with no care if Blue Cross were to move out of state. To see all the comments, see: www.dmhc.ca.gov/.

The Department is supposedly going to make a decision by the end of August 2007 on whether the company has, or has not, kept its promises to the state.