As public hearings begin today on the proposed sale of Blue Cross and Blue Shield of Kansas to an Indiana company, many Kansans are wondering what the deal would mean to them.
Here's a look at some of the commonly asked questions and their answers.
Hearings on the deal will be conducted through Wednesday in Topeka.
What is the deal?
Blue Cross and Blue Shield of Kansas and Anthem Blue Cross and Blue Shield have agreed to a plan that would convert Blue Cross of Kansas to a stock insurance company. Then, Anthem would buy all the stock for $190 million.
What does that mean to me?
Currently, people who have policies with Blue Cross of Kansas have membership rights, which include the right to vote for directors of Blue Cross of Kansas and to receive any remaining value in the unlikely event the company is liquidated.
If Blue Cross of Kansas is converted to a stock insurance company and purchased by Anthem, those membership rights would be terminated, and policyholders would receive cash payments that include a part of Blue Cross of Kansas' reserve and revenue from the stock sale to Anthem. Blue Cross has estimated that amount to be $321 million.
What needs to happen for the deal to go through?
Two-thirds of the policyholders who vote must vote in favor of the plan. If more than half of policyholders vote, then a simple majority is needed. Also Kansas Insurance Commissioner Kathleen Sebelius must approve both the plan and alliance agreement with Anthem.
Who can expect money from the payouts?
Eligible policyholders can expect payments. But not everyone who is covered by Blue Cross of Kansas is an eligible policyholder.
Blue Cross of Kansas covers 715,000 people, but there are only 171,500 policyholders. In Douglas County, 29,618 people are covered by 17,323 Blue Cross of Kansas policies.
Statewide, most of those policies are for supplemental Medicare insurance (124,000 policies), individual insurance (36,500), small group plans for businesses up to 50 employees (10,500), and large group plans for businesses with more than 50 employees (500)
Payments to group policies would go to the individual business. If the employers are subject to the federal Employee Retirement Income Security Act (ERISA), they are generally obligated to provide employees the benefit of the payment.
Some businesses are self-insured, and Blue Cross simply administers their plans. Such plans generally would not receive payments. Included in the self-insured category are state employees, who will receive no payout from the proposed deal.
Senior citizens with Blue Cross supplemental Medicare insurance will receive average payments of $1,500, company officials said.
Can policyholders who have already voted change their vote?
Yes. To do so, you may call the Policyholder Information Center at (800) 756-8400 to request a new ballot.
Or you may send in a letter with written notice that you are revoking the previous vote and affirming a new one. The letter may be sent to Blue Cross Blue Shield of Kansas, c/o EquiServe Trust Company, N.A., PO Box 8920, Edison, New Jersey, 08818-8920. The revocation must be received by Friday.
Or you may revoke and recast your vote in person at a policyholder meeting at 10 a.m. Friday at the Regency Ballroom of the Ramada Inn Downtown, 420 S.E. Kansas Ave., Topeka.
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