The News Journal

By JONATHAN STARKEY • The News Journal • May 17, 2011

During public meetings in Georgetown and Dover this week, Blue Cross Blue Shield of Delaware President Tim Constantine urged state insurance regulators to clear the company's proposed merger with Pittsburgh-based Highmark Inc., insisting the Delaware firm could not compete long term without the deal.

Constantine, reading from prepared remarks on Monday and Tuesday, said that a merger rejection would cost the company $80 million in computer upgrades. Blue Cross customers -- there are 320,000 in Delaware -- would need 3 percent higher premiums, he said.

Both meetings were sparsely attended.

"Without insurance department approval of this partnership ... we run a long-term risk of steadily losing our subscribers to large, for-profit health insurance companies based outside of Delaware," Constantine said. "This would threaten our ability to maintain a substantial employment level in the state and support community health and human-service programs at the levels we have done for years."

The Delaware Department of Insurance, which will rule on the deal this fall, is hosting this week's meetings. The third and final meeting is scheduled for 6 p.m. Thursday at the Carvel State Building in Wilmington. A more formal public hearing is scheduled for August 1.

Constantine offered some details about needed computer improvements at this week's hearings, saying Highmark's systems would allow customers to learn co-pays at the time of service and result in faster reimbursements to providers. Blue Cross also would be able to tailor systems to individual employers to lower costs.

Two members of the public spoke at each of this week's sessions, held in Georgetown on Monday night and the insurance department's Dover offices on Tuesday.

At Delaware Technical and Community College's campus in Georgetown, speakers asked how the deal would affect Delaware's uninsured population and the company's suite of products. Deputy Insurance Commissioner Gene Reed, who is overseeing this week's meetings, directed Blue Cross to provide answers in writing and pledged to publish those answers on the department's website.

In Dover, Dr. Jo Ann Fields, a Felton family physician, urged regulators to put an end to the "entrenched pattern of shielding BCBSD finances and rate filings from public scrutiny."

Fields has complained previously about a lack of transparency in state reviews of premium increase requests. Those filings are shielded from public view until they're reviewed and approved -- and justifications for them can be protected indefinitely.

"Public scrutiny of the reasons behind rate increases can only help us all understand where the cost increases are in our health care system so we can best address how to hold down costs," Fields said.

Fields urged the department to rein in Blue Cross' surplus levels. Excess reserves should be returned to customers or "applied against future rate increases."