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Archive for Thursday, December 6, 2001

Some 300 people show for dialogue regarding merger

December 6, 2001

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— The proposed merger of Blue Cross and Blue Shield of Kansas with Anthem Insurance Co. is drawing an unusual amount of interest in parts of Kansas.

Nearly 300 people attended a meeting Tuesday in Hays to discuss the merger. Patrick Cantilo, a legal expert helping the Kansas Insurance Department oversee the proposed merger, said public meetings on mergers generally draw 20 to 25 people.

"I was delighted to have that many people there and obviously paying attention," Kansas Insurance Commissioner Kathleen Sebelius said. "I guess the bottom line is, whether or not citizens are policyholders, they definitely have a voice."

About 171,500 people are Blue Cross of Kansas policyholders. They have received ballots to vote on whether to change the company from a mutual company to a stock company.

If that move is approved and the state insurance department agrees, Indiana-based Anthem Insurance Co. will purchase Blue Cross of Kansas.

"It's my job, both by law and by approach, that I represent the other two-and-a-quarter million Kansans who don't have a vote," Sebelius said.

BCBS of Kansas and Anthem played to a tough audience in Hays, with audience members questioning how the merger will affect them and raising concerns about Anthem's track record in other states.

Shirley Green, Hays, wanted to know how her rates will change if the merger takes place.

Kathy Greenlee, speaking for the insurance department, said rate increases are inevitable.

"If this transaction is not approved, regardless of the merger not going through, your rates will go up," Greenlee said.

Anthem Insurance officials have said in the past that Kansas policyholders will see a name change and receive a new card to carry but won't see any significant differences.

But Kansas doctors, hospitals and nurses, as well as an advocacy group for poor and working class families, are nervous about the conversion of a Kansas company owned by its policyholders into a branch of an out-of-state firm with stockholders.

Bill Roy, a retired physician and former congressman from Topeka, was blunt in his disapproval of the proposed merger.

"I just want to express that I think this is a very bad idea," Roy said. "If we lose the company that we as policyholders own, it's gone forever. What we're going to end up with is one more commercial insurance company like Aetna, like Prudential."

Roy said BCBS of Kansas pays out more of each premium dollar in claims than does a commercial insurance company.

He also said Anthem actually will pay less than the projected purchase price because it will get $155 million of surplus cash built up by BCBS of Kansas over the last 30 years.

"I've been in Kansas over 50 years, and I think this is the most important thing that has come up," Roy said to applause from the audience.

Anthem operates former Blue Cross plans in eight states: Colorado, Connecticut, Indiana, Kentucky, Maine, Nevada, New Hampshire and Ohio. It covers about 7.8 million people.

BCBS of Kansas is by far the largest health insurer in the state, with 45 percent of the market. It has 172,000 group and individual policies that cover 400,000 people, and another 315,000 who work for employers who self-insure but have their plans administered by the Blues.

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