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CAREFIRST WATCH COALITION
Why should those of us working in mental health care about whether or not
CareFirst, the region’s BlueCross BlueShield, is meeting its non-profit
charitable obligation?
An Annual Obligation of More Than 50 Million Dollars
An in-depth study released by the DC Appleseed Center for Law and Justice in
December 2004 (Carefirst: Meeting Its Charitable Obligation to Citizens of the
National Capital Area) finds CareFirst’s District of Columbia affiliate, GHMSI
(Group Hospitalization and Medical Services, Inc.), to be falling short of its
mandated obligation by more than 50 million dollars annually. There is no doubt
that an annual contribution of that magnitude could make a dramatic difference
to health care in this region.
On learning that DC Insurance Commissioner Mirel had called for a hearing on the
Appleseed study, our GWSCSW representative on the CareFirst Watch Coalition,
Mary Lee Stein, suggested that we take action.
First, GWSCSW arranged for a briefing at the Appleseed Center in mid-March on
the topic of “CareFirst’s Charitable Obligation and the Implications for Area
Mental Health Care”. We invited NASW, the Federation, and other groups
interested in mental health and encouraged those who attended to join us in
presenting testimony at the hearing.
Commissioner Mirel’s All-Day Hearing
At the hearing on March 24, CareFirst presented its arguments. For two hours,
CareFirst CEO William Jews and others described CareFirst as a good corporate
citizen with no particular obligation to the public beyond serving its
subscribers. They claimed that the huge reserves (far beyond those of any of the
other Blues or any for-profit insurance company) are needed in case of a
catastrophe.
Commissioner Mirel questioned CareFirst witnesses, then gave the DC Appleseed
Center for Law and Justice an hour to present the findings of their intensive
two-year study (see
http://www.dcappleseed.org), which concluded that CareFirst indeed has a
legal obligation to the community mandated by its charter, and that the surplus
(that is, what is over and above what can conceivably be needed, using insurance
standards) speaks to an obligation far beyond the grants it has thus far offered
to community projects.
After a brief break for lunch, a variety of insurance industry employees,
CareFirst grant recipients, and concerned community groups gave testimony.
Mary Lee Stein, LICSW and Margot Aronson, LICSW represented GWSCSW at the
hearing. Commissioner Mirel expressed his appreciation for our testimony, noting
his long connection with the Society (he was the GWSCSW lawyer for a number of
years) and his profound respect for the social work profession.
Commissioner Mirel’s report on the hearing, published on May 15, 2005, found
that GHMSI does indeed have both authority and responsibility in its charter to
support the public health of communities in its service area. He cautioned that
a strong surplus is needed to protect policyholders against unanticipated
catastrophes, and that deciding how to fulfill its charitable obligation should
be up to the CareFirst/GHMSI Board. Nonetheless, the Commissioner pointed out,
GHMSI could do more for the community than it is currently doing, based on its
strong financial position.
The Appleseed study, Washington Post articles and editorial, and the
Commissioner’s hearing have been effective in bringing pressure to bear;
CareFirst has announced several charitable initiatives since the onslaught of
negative publicity.
The CareFirst Watch Coalition will continue efforts to keep the CareFirst issue
in the spotlight. Check out the Coalition website,
http://www.carefirstwatch.com, to learn more, to link to the hearing report
and the Appleseed report, and to get involved.
Following is the testimony presented by GWSCSW:
My name is Margot Aronson; I am president of the Greater Washington Society for
Clinical Social Work. I have been asked to speak to the charitable obligation of
CareFirst by the Society. I have also been asked to represent the Maryland
Clinical Social Work Society, and the Clinical Social Work Guild 49 of the
Office & Professional Employees International Union (OPEIU).
Several years ago, learning of plans for multi-million dollar compensation
packages set aside for executives involved in a takeover of CareFirst, our local
non-profit BlueCross Blue Shield affiliate, we in the Society were outraged. As
social workers daily seeing the critical health and mental health needs of
clients go untreated because insurance coverage is out of reach, we found this
level of management greed to be morally offensive. (I might add that CareFirst
social work provider rates of $50 to $66 per hour seemed quite a contrast to
what it pays its executives, and what the company evidently can afford.) On
learning that the buyout plans had involved minimal attention to the
non-profit’s financial responsibilities to the community, we were even more
offended.
We realize that the buy-out proposal is dead, at least for now. However, the
issues it raised are very much with us. From the beginning, the Society decided
to follow the issue closely; we joined the CareFirst Watch coalition and have
stayed involved as the Appleseed study proceeded. We were pleased to participate
in the public health survey portion of the Appleseed study of the CareFirst
charitable obligation to citizens of the National Capital Area.
We in the Society are convinced, based on the conclusions of Appleseed’s
intensive analysis, that the local CareFirst affiliate has a much greater
charitable obligation to the District of Columbia community than it has
proposed. Unlike other Blues around the country, CareFirst has taken advantage
of its non-profit status for many years without fulfilling the charitable side
of the equation. In fact, the organization has benefitted not just from its
special tax-exempt status but from the mere fact that we all tend to see the
Blues as beneficent, as doing their best within the limits; many of us have
chosen to subscribe with them and work with them because of that moral edge.
We social workers see mental health issues running through all the problems of
the District: HIV/AIDS, domestic violence, gangs, teen pregnancy; we urge that
the mental health needs of the community be considered in any public
conversation about what health services might be supported by increased
charitable activity from CareFirst. Whether the amount of CareFirst obligation
-- that would not add to subscriber rates or in any way threaten the
organization’s viability -- is as Appleseed calculates, $50 million per year,
there is absolutely no question that CareFirst should be contributing
significantly more.
We ask that you hold CareFirst to its moral and ethical responsibility, as well
as its legal obligation, for a significantly increased charitable activity.
Thank you.
For GSCSW Legislative
Information contact:
GWSCSW
PO Box 3235
Oakton VA 22124
202-537-0007
Fax: 703-938-8389
email: gwscsw@gmail.com
Website http://www.gwscsw.org