Rep. Pricey Harrison Wants Blue Cross Probe


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Nov. 6--RALEIGH -- Rep. Pricey Harrison has asked the state's attorney general and Department of Insurance to investigate Blue Cross Blue Shield of North Carolina's use of campaign-style tactics aimed at defeating controversial federal health insurance legislation.

The Greensboro Democrat wants to know whether the insurer violated the state's do-not-call registry law with an automated message in late October. And she questions whether it is proper for the insurer to use its premiums to pay for the calls and two recent pieces of direct mail.

"I have heard from a number of constituents who were really upset about the postcard campaign," Harrison said Thursday. "There are a lot of angry taxpayers, policyholders and state employees."

Harrison has been a backer of the state's do-not-call registry and said people on that registry, such as herself, were receiving the calls. That law typically prevents companies from calling and soliciting new customers or donations.

"These aren't solicitation calls. We're not soliciting anything," said Lew Borman , a spokesman for the insurer. Households that received the calls were drawn from voter registration rolls. There is an exemption in the law for political activity.

Blue Cross Blue Shield is the state's largest insurer with more than 3.7 million members.

Borman said the company does not oppose all health insurance reform efforts under way.

But the company does believe that creating a public health insurance option -- a mechanism by which a federally subsidized plan would compete with the private market -- would drive up costs for companies and premiums for those who are insured.

"Our folks think we have a responsibility to be involved," Borman said. "After all, who knows more about this stuff and how it works and what impacts changes could have than we do?"

The mailers in question included a postcard that could be mailed to U.S. Sen. Kay Hagan , a Greensboro Democrat, urging her to oppose the public option. Hagan said recently that she supported the public option contemplated by Sen. Harry Reid of Nevada.

Harrison questioned whether it was appropriate for the insurer to use its funds given its "preferred tax status" as a not-for-profit.

"I am concerned that they have potentially violated their business charter by engaging in political advocacy," Harrison wrote in a letter to the attorney general and Department of Insurance.

Harrison misunderstands the company's status, Borman said.

"We are a fully taxed medical services and hospital corporation," Borman said, adding that the company paid $162 million in federal, state and local taxes last year.

However, the fact the company paid taxes does not make it a for-profit company, said Adam Searing , a health policy expert with liberal-leaning advocacy group The North Carolina Justice Center.

"They are a nonprofit organization," Searing said. "They are organized under a special part of the nonprofit corporation law in North Carolina. They have a nonprofit board."

The company does not have shareholders nor is it a mutual company owned by its members. And Searing points out there is a whole provision of the law governing Blue Cross and Blue Shield that would govern its conversion to a "for-profit" company should the insurer ever decide to do that.

Harrison and Searing say that it's appropriate for the attorney general and the state's insurance regulators to ask questions about what could be construed as taxpayer-abetted political activity.

"We're reviewing the complaints we have received regarding the mailing and will assess the letter's requests when we receive it," said Noelle Talley , a spokesman for Attorney General Roy Cooper.

A spokeswoman for the Department of Insurance said officials would review the request but said state law gave the regulators little say over a company's communications strategy or political activity. The department, she said, was focused on ensuring companies could meet their obligations to policyholders.

Contact Mark Binker at (919) 832-5549 or mark.binker@news-record.com

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