Bill allowing BCBSNC to reorganize signed into law by Cooper

Gov. Roy Cooper signed four bills into law Saturday, including the controversial H.B.346, Reorganization & Economic Development Act, which will allow Blue Cross Blue Shield North Carolina and Delta Dental to reorganize and create a holding company for billions in surplus revenue.

“Our goal is comprehensive health insurance with access to care in every county of our state at the most affordable cost possible, and this legislation with consumer protections in place aims to keep the company strong while continuing its commitment to its North Carolina home,” Cooper, a Democrat, said in a press release.

The measure passed the Senate with a bipartisan vote of 41 to 5 on May 30, with five Democrats voting against it. It passed 86-26 in the House in April.

Rep. John Bradford, R-Mecklenburg, one of the bill’s sponsors, said it works to level the playing field for Delta Dental and BCBSNC, two hospital service corporations. He said the not-for-profit entities currently under state law don’t have the same flexibility as other companies.

“Blue Cross NC appreciates the leadership of the General Assembly and the Governor to address the growing health care needs of our state,” Sara Lang, spokesperson for NCBCBS, said in an emailed statement. “We are proud to work in partnership to make health care more affordable, easier to navigate, and accessible for all North Carolinians. Blue Cross NC will continue to listen to and support the communities we serve, looking at ways to bring the right solutions and meaningful partnerships to support our customers and our state’s economy.”

Ahead of last month’s vote, N.C. State Treasurer Dale Folwell urged lawmakers to remove it from the Senate calendar and consider amendments suggested by State Insurance Commissioner Mike Causey.

“Blue Cross Blue Shield has had a monopolistic market share for decades as well as a preferred status among state insurers,” Folwell said in a statement. “This has resulted in Blue Cross Blue Shield accruing billions of dollars of reserves that rightfully belong to policy holders who have been punished for decades with higher premiums and declining customer service.” 

The bill has faced opposition stirred by Causey, who argued that Department of Insurance would have no say over how much policyholder money would be taken out of the insurance company and put into the holding company. However, Causey’s department retains oversight over BCBSNC as an insurance company.

“If you look at what’s happened this year, we’ve had three major bank failures, the second and third largest bank failures in United States history, and those banks fail not because of criminal activity but because of poor oversight or no oversight,” he said. “Lack of regulatory controls. So that’s what Blue Cross is asking to do.”

Supporters of the bill admonished Causey, saying his campaign against the bill was ‘hyperbole.”

“This is not policyholder money,” Sen. Jim Perry said in committee. “That is a mischaracterization. Insurance companies have a mandate to pay out a certain percentage of every dollar in claims, but they have to do that, so anything left over does not belong to a policyholder.”

Supporters say the bill gives BCBSNC the same structure that other companies in the state have, like North Carolina Farm Bureau. The Department of Insurance also retains all oversight of Blue Cross insurance, and the legislative oversight remains in place.

Both Folwell and Causey, who vocally opposed the bill over concerns that it will cause consumers to pay higher premiums, used last week’s Council of State meeting to appeal directly to Cooper to consider amendments proposed by Causey which were not added by the legislature.

“Commissioner Causey…has put forth amendments that I hope, even as [the bill] sits on your desk, that you will consider, amendments that…will protect consumers in North Carolina,” said Folwell directly to Cooper.

Causey suggested that lobbying from BCBSNC heavily influenced H.B. 346’s passage in the General Assembly.

“In my opinion, it did not have a fair hearing in both chambers because of the pressure Blue Cross put on it politically to get it pushed through…I’m not sure that the legislators heard from all the folks that I heard from across the state,” said Causey.

Other bills that Cooper signed into law include H.B. 116, Modify Laws Affecting District Attorneys, S.B. 100, Authorize Haw River State Trail, and H.B. 412, Modify Property Transfer to Pender County.