Archive for Tuesday, October 22, 2002

s purchase of company

October 22, 2002


— The fate of the proposed sale of Blue Cross and Blue Shield of Kansas to an out-of-state company was at the center of a radio debate Monday between insurance commissioner candidates.

Earlier this year, the current insurance commissioner, Kathleen Sebelius, rejected the proposed affiliation between Blue Cross of Kansas, the largest health insurance provider in Kansas, and Anthem. A state district judge overturned Sebelius' order, and now she has appealed that decision to the state Supreme Court. Sebelius, a Democrat, is running for governor, leaving open the race for her position as commissioner.

Democrat Jim Garner and Republican Sandy Praeger said they expected they would have to deal with it if elected insurance commissioner on Nov. 5.

Garner, a state representative from Coffeyville, opposes the sale of Blue Cross of Kansas to Anthem Insurance Cos. of Indiana. He said he suspected Blue Cross of Kansas executives were pushing for the transaction because they will benefit financially from it.

"It's very clear that the executives of Blue Cross are gung-ho pushing for this. There's probably some financial rewards for them there for doing that," Garner said.

But Graham Bailey, a spokesman for Blue Cross of Kansas, said that was untrue.

"If the deal goes through, they don't receive any bonuses, they don't receive any stock. There is no financial incentive," Bailey said.

Praeger, a state senator from Lawrence, said if the court sent the proposed merger back to the insurance department, she might want Blue Cross of Kansas policyholders to vote again on the transaction.

The company has already received the OK from policyholders to go forward with the deal with Anthem, offering $320 million to 172,000 policyholders in exchange for the policyholders giving up their rights to operate the company.

But Praeger said, "It's quite possible we would want to go back to policyholders for another vote. It's possible the payout could change because of the changing marketplace."

Bailey said holding another vote could kill the deal because it would cost millions of dollars to survey policyholders again.

"We would not want to go out for another vote. We would have to take another look at it," he said. "We are definitely the launch pad for a lot of political debate that is going on right now."

During the radio debate broadcast live on KMAJ-AM in Topeka, Garner and Praeger asked questions of each other and took questions from callers

Garner also used the debate to criticize Praeger for taking campaign contributions from insurance companies, including contributions from executives of Blue Cross of Kansas.

"There is a clear choice between me and Sandy. I am not taking money from the regulated companies," said Garner.

He praised Sebelius for refusing insurance money during her eight-year tenure, saying that prior to her administration, the coziness between insurers and regulators was embarrassing.

"I have no idea why we would want to go back down that road," he said.

But Praeger said she remained independent despite receiving tens of thousands of dollars from insurance companies.

"Campaign contributions are not what this is about. It's about the quality of the candidate," she said.

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