Pa. medical association says Blues reserves are too high

At a public hearing, the state medical society and consumer groups gave reasons for maximum surplus limits that Pennsylvania's Blues plan can hold.

By Julie A. Jacob, AMNews staff. Sept. 23/30, 2002.

Pennsylvania's Blues plans are keeping up to four times the reserves as non-Blues plans in the state, stashing away cash that could be used to pay doctors and decrease patient premiums, the state's medical society says.

At a state Dept. of Insurance hearing about the Blues surpluses, the Pennsylvania Medical Society and consumer organizations said the reserves of the four Blue Cross Blue Shield plans are much higher than those for non-Blues plans. They range from Highmark's $2.3 billion to Blue Cross of Northeastern Pennsylvania's $430 million. The insurance department scheduled the public hearing in response to legislative and consumer complaints about the high levels of reserves held by the plans.

The number of days of expenses that those surplus levels represent ranged from a high of 336 days for Blue Cross of Northeastern Pennsylvania to a low of 42 days for Independence Blue Cross, according to the state medical society' report on the companies' annual statements.

In comparison, reserves for the state's non-Blues health plans ranged from a high of 51 days of expenses for Three Rivers Health Plans Inc. to a low of 24 days worth of expenses for Health Partners Inc.

Ideally, health insurers should have 30 to 60 days worth of expenses in reserve, said Howard Richter, MD, president of the state medical society, who testified at the public hearing.

"The physicians of Pennsylvania would like to have increased payments for physicians and decreased premiums to patients," Dr. Richter said. "Any reserves that could be used to safely do that would be of benefit to the commonwealth." [...]