Archive for Saturday, January 12, 2002

Few attend Blue Cross session

With space for 900, 40 hear Anthem’s proposal to policyholders

January 12, 2002


— The most notable thing about a special meeting Friday for policyholders of the state's largest health insurance company was how many seats were empty almost all of them.

The meeting was held to give policyholders of Blue Cross-Blue Shield of Kansas a chance to change their votes on its proposed acquisition by Anthem Insurance Companies Inc. of Indianapolis.

In a hotel ballroom with seating for about 900 people, the session drew only about 40 policyholders, some of whom expressed concern Blue Cross has about 172,000 policyholders. They own the company and must approve the deal with Anthem, which is a publicly held company whose executives answer to its shareholders. The change in ownership structure is one of the big issues in the deal.

Critics had hoped hundreds of policyholders would attend the meeting and switch their votes. The Kansas State Nurses Association and Kansas Association for the Medically Underserved ran a radio ad urging policyholders to attend.

Blue Cross officials plans to announce the results of the voting at a news conference Monday morning at its headquarters in Topeka. If policyholders approve, the deal still must be approved by Insurance Commissioner Kathleen Sebelius, who plans to issue her ruling in February.

Opponents of the sale suggest that Anthem will have to increase premiums and decrease services to make a profit on the Kansas operations. Blue Cross said the acquisition will give it access to capital and new markets, and Anthem, which runs former Blue Cross operations in eight states, says it can save money through efficiencies.

Some of those who spoke at Friday's meeting expressed worry that coverage would be curtailed or cut off for some Kansans.

But John Knack, Blue Cross president and chief executive officer, said federal and state law protect policyholders.

"There are more protections built in regulations at the state and federal level than you might imagine," Knack said.

But not all policyholders are convinced.

Tom Farr, Topeka, attended the meeting even though he had no plans to switch his vote against the deal. A 79-year-old Army Air Forces veteran from World War II, he has been a Blue Cross policyholder since he left the service in 1946.

He sat through three days of administrative hearings before Sebelius and became more convinced of his position.

"I still haven't found anything that makes sense for the policyholder in Kansas," he said.

Farr also wasn't impressed by the money Anthem would pay policyholders for the company, between $273 million and $321 million. Most of it represents money those policyholders paid in premiums and the company had in reserves.

"To me, it's like dangling a carrot in front of the rabbit you hope to trap," he said.

Knack said Blue Cross is tracking the voting, but he wouldn't discuss it. He said the low turnout for Friday's meeting showed that most policyholders are comfortable with their votes.

"The appeals to change votes have not been well received," he said.

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