Topeka — Promised an average cash payment of about $1,500 each, policyholders of Blue Cross and Blue Shield of Kansas approved a deal that would allow the company's sale to a large, for-profit insurer, officials said Monday.
The final tally was 63,504 policyholders for the sale to Anthem Blue Cross and Blue Shield and 36,618 opposed, or 63.4 percent to 36.6 percent.
The vote was crucial to Kansas Blue Cross officials in perhaps the biggest insurance deal in state history. But opponents of the proposal -- a group of health care providers and advocates for the needy -- say their fight isn't over by a long shot.
Anthem, an Indianapolis based insurer, has acquired Blue Cross plans in eight states. It has proposed buying Kansas Blue Cross, the largest insurer in Kansas covering about 715,000 people, for $190 million. Under the deal, policyholders voted whether to divest their ownership rights in return for a cumulative cash payment that could reach $320 million.
Under rules of the proposal, two-thirds of the 172,000 policyholders had to approve the deal, unless more than a majority of policyholders returned their proxy cards, which detailed how much money they would receive.
Since more than a majority voted -- about 58 percent -- a simple majority of yes votes was needed to approve the deal.
Now the decision whether to allow Anthem to buy the Kansas Blue Cross falls to Kansas Insurance Commissioner Kathleen Sebelius, who is expected to rule by Feb. 25.
"It is our hope that she will see the merits of our position concerning the conversion and will render a positive decision for us," said John Knack, president and chief executive of Kansas Blue Cross.
Opponents, however, stepped up criticism of the deal, saying the vote reflected policyholder interest in the offers of money rather than weighing of the proposal's merits.
"I don't think 63 percent is any kind of resounding victory," said Terri Roberts, executive director of the Kansas State Nurses Assn. "Anytime you wave around that kind of money, it can be very seductive."
Roberts also said that many people voted on the proposal before they could learn its details, such as a study by Insurance Department consultants that said with Anthem in charge insurance rates would increase six percent to seven percent above what Kansas Blue Cross needed. The reason for this, the consultants said, was because Anthem is driven by profit needs of its stockholders.
"People couldn't read about the implications," Roberts said.
The insurance department filed its expert testimony on Dec. 31, while ballots on the proposal were mailed to policyholders starting Nov. 19. Voting ended Friday. ( Jan. 11)
Knack said he believed the offers of money had some impact on the vote, but added that the margin of support was "overwhelming."
Knack said if Sebelius approves the deal, policyholders could start receiving checks by the summer.
Knack repeated remarks he made Friday at a policyholder meeting, in which he defended the sale to Anthem, saying that the trend in the insurance business was to align with larger companies to broaden risk and expenses over a larger number of policyholders.
In addition to the nurses group, associations representing doctors, hospitals and people needing health coverage, oppose the proposal.
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