There is a diary currently on the rec list regarding a report done by ND's Insurance Commissioner regarding Blue Cross Blue Shield of ND. There is definitely a story here, but its bigger than just an insurance company with near-monopoly control of the ND insurance market paying out exorbitant bonuses. It's about politics, corruption, and a total unwillingness to regulate on behalf of the insured.
Follow me over the flip.
Crossposted at NorthDecoder
In order to get a real grasp of the situation I need to transport you back about 2 years. About this time in 2007, Jim Poolman(R) stepped down as North Dakota's Insurance Commissioner, like Rick Clayburgh(R), the Tax Commissioner to become a lobbyist (Poolman for the insurance industry, Clayburgh for the ND banking industry. Poolman's Hoeven(R-Gov)-appointed successor was former head of the Cass County(Fargo & surrounding area) Republicans, Adam Hamm.
The polite term for Hamm is "ambitious." I prefer to say that he cares about himself, his own political advancement, and nothing else. I don't even trust him as far as I can throw him. In mid-August of 2008 when he is up for election is where the real story begins.
Blue Cross, as a "regulated"(and I use that term loosely) company was denied a rate increase by the Insurance Commissioner. Of course there was a "reason" for it, but all of it ended up turning out bogus in the end. There's more on that here. Basically an Administrative Law Judge said, "this is a load of crap." Then Blue Cross started lobbying for a bill in the State Senate to attempt to limit the authority of the Insurance Commissioner in the way of rate increases. It passed in the Republican-controlled State Senate.
Hamm kicked into high gear and threw the kitchen sink at Blue Cross as the bill was waiting to be heard in the Industry, Business, and Labor Committee. While the bill was waiting to be heard, a story showed up in the Forum(ND's largest Newspaper-and the only one worth reading) regarding a series of trips that was given to employees of Blue Cross to the Grand Cayman Islands. Shortly thereafter the Board of Blue Cross fired their CEO, paid him a $2.2 million dollar severance package, and sent him on his way.
I spoke to a couple of ND politicos yesterday afternoon, including a person that was a member of the committee in the State House considering the bill that had passed the Senate regarding the authority of the Insurance Commissioner to deny rate increases. As the committee was beginning its hearing the Blue Cross lobbyist came in and said that he had just got off the phone with the new interim CEO at Blue Cross, and that a deal had been struck with the Insurance Commissioner and they were withdrawing their support for the bill(which was on its way to being passed by the 61-33 republican controlled house). It was dead in the water.
Now we learned yesterday about the report that was mentioned on the Rec List. I have a very strong feeling that there is far more to this report than meets the eye. The Forum is not a credible news source. They generally regurgitate anything that is leaked to them by Republicans, with the occasional nod to the Democratic Congressional delegation for a job well done. Adam Hamm Seems to be getting too much credit here and nobody at the Forum seems to be connecting the dots here. What is Hamm's motive for this investigation?
I have had two thoughts from the people I have spoken with over the last day or so. First thought is that Hamm is still beating Blue Cross into submission and using the broad regulatory authority he has to score political points. The second idea, which I tend to subscribe to is that Hamm cut a deal with Blue Cross's chairman of the board(who took over as the interim CEO) that he would be able to break a couple of stories like this and in return Blue Cross would get their rate increases.
The lesson here is a few fold.
1.) Private health insurance(even in a coop) doesn't work. Blue Cross is a decent insurer comparitively, but they are a monopoly and clearly are abusing their power.
2.)Don't put people that don't believe in regulation in charge of regulating. they will regulate only to the benefit of themselves, not the public at large. It's a sensational story, and Hamm has proposed some reforms to "solve" the issue, but the legislature won't go into session until 2010 and even of they do take up the reforms they will very likely be toothless.
Its all a bunch of baloney. It always is in ND.
We deserve better.