The city of Lawrence probably will oppose the proposed sale of Blue Cross and Blue Shield of Kansas to an Indiana-based insurance company.
Frank Reeb, the city's administrative services director, said in a Thursday memorandum he wasn't worried services would get worse with Anthem Blue Cross and Blue Shield, the purchaser. Instead, he said they're unlikely to get better.
So Reeb's asking the Lawrence City Commission to authorize a vote against the merger.
"Because of its already high level of customer service, we see no benefit to the city of Lawrence or its covered members if (Blue Cross of Kansas) were to merge with Anthem," Reeb wrote.
Commissioners indicated they'll follow Reeb's recommendation.
"I was very glad to see the staff recommendation," Commissioner Sue Hack said. "That was my inclination as well."
Anthem, which has 8 million policyholders in eight states, has proposed buying Blue Cross of Kansas the state's largest insurer that covers about 700,000 people for about $190 million.
To take effect, the proposal must be approved by policyholders and Kansas Insurance Commissioner Kathleen Sebelius, who has scheduled a three-day hearing on the matter in Topeka, starting Monday.
The city runs its own health insurance program for its more than 700 employees. However, it paid Blue Cross of Kansas roughly $450,000 in 2001 to process the insurance claims and "reinsure" the city when claims start to strain city coffers. Blue Cross takes over when the city has paid more than $75,000 in a year in claims to an individual employee, or more than $4.5 million in total claims.
That arrangement means the city of Lawrence will get a relatively small payout in the conversion of stock $500 if the sale occurs. But it also gives the city a vote in the merger, and Reeb is asking the Lawrence City Commission to authorize a vote against the sale.
He wrote that the merger probably couldn't much improve on the customer service, administrative costs, reinsurance costs or health-care provider networks already provided by Blue Cross of Kansas.
That leaves no compelling reason to approve Anthem, Reeb said.
Anthem and Blue Cross of Kansas officials have touted the proposed sale as a way for Blue Cross of Kansas to maintain quality care and stay competitive in an insurance market marked by consolidation. Opponents say the shift from policyholder-owned Blue Cross of Kansas to shareholder-owned Anthem could result in profit-driven decisions that ignore health concerns.
"The added burden of having to make a profit could be incompatible with good health-care decisions," Mayor Mike Rundle said.
The commission meets at 6:35 p.m. Tuesday in City Hall, Sixth and Massachusetts streets.
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