CAHC NEWS ALERT

Released February 5, 2001

On February 1, 2001, Anthem Insurance of Indiana, parent company of Anthem Blue Cross/Blue Shield of Maine, announced that it will be converting from a mutual insurance company to a publicly traded stock company. The conversion, called demutualization, will transfer ownership of the company from its policy-holders to purchasers of the company's soon-to-be-issued stock.

The conversion of Anthem to a publicly traded company is an ominous sign for Anthem Blue Cross/Blue Shield policy holders in Maine. While Blue Cross/Blue Shield of Maine lost its non-profit status last year when it was acquired by Anthem, the conversion from a mutual to a publicly-traded company will disempower Maine consumers even further by shifting control of the company from policy holders to Wall Street. Quality of care for Maine policy-holders could suffer as Wall Street investors demand higher profits from the Indiana-based company.

The conversion is especially troubling in light of the repeated assurances by company officials throughout the acquisition process that, as a mutual insurance company, they would continue uphold the same values practiced by non-profit Blue Cross/Blue Shield of Maine. The company repeatedly stressed that they were not, in fact, a "for-profit" company because they were mutualized (i.e. owned by their policy holders).

Anthem Insurance acquired the non-profit Blue Cross/Blue Shield of Maine last summer amid a swirl of controversy. At the time, the deal was strongly criticized by consumers, health care providers, and many state legislators. Consumers for Affordable Health Care Foundation joined a number of organizations to "intervene" on behalf of consumers in the acquisition proceedings in an attempt to stop the sale of Maine's last non-profit insurance company. While interveners were able to win a number of modest protections for Blue Cross/Blue Shield policy holders, they were unable to halt the sale.

Thanks to a 1997 law, passed in part due to the advocacy of CAHC Coalition, all the proceeds from the sale of Blue Cross/Blue Shield to Anthem were required to be put into a charitable foundation dedicated to improving access to health care for Maine people. At present, CAHC Coalition is litigating the decision by the Superintendent of Insurance that reduced the independent valuation of Blue Cross (and thus the amount available to fund the new foundation) from $102.5 million to about $81 million. A court hearing should be set by early March 2001.

Consumers for Affordable Health Care Foundation is a Maine-based non-profit organization that advocates the right to health care for every man, woman and child.

Read the Anthem Press Release on their demutualization plan.

Information on the sale of Blue Cross from the Bureau of Insurance, including text of the superintendent 's decision.