NC's insurance commissioner blasts bill as 'all about corporate greed'

North Carolina’s top insurance regulator on Monday continued to denounce a bill that would let Blue Cross Blue Shield of North Carolina reorganize and potentially move billions in assets while weakening, Insurance Commissioner Mike Causey said, state regulation.

Causey blasted the proposal as “all about corporate greed” and said the bill — which has broad and bipartisan support at the legislature — looks like an attempt to evade scrutiny and avoid a legal trigger that could otherwise lower customer premiums.

The company says House Bill 346 is needed to modernize “outdated regulations for the first time in decades,” allowing Blue Cross to “operate more efficiently, maintain its not-for-profit status and better meet the needs of its members by investing in solutions that improve access and make health care more affordable.”

Causey, a Republican in his second term as commissioner, said the company’s lobbying team has resisted his efforts to write more oversight into the bill. He released an opinion piece and called a press conference Monday to oppose the measure, calling it a well written effort from the state’s largest insurer to obscure company finances.

“Even with simple corporate transactions the devil’s in the details,” Causey said. “I say with this bill the devil’s in the lack of details.”

The bill would let Blue Cross, as well as Delta Dental, the state’s only other entity organized as a “hospital service company,” create a holding company that would own the insurance business. That holding company wouldn't be subject to the same level of regulatory scrutiny Blue Cross is now, and executives could move some of the $4.6 billion the company has in reserves over to the holding company.

That gives Blue Cross more flexibility to invest the money and enter partnerships, and company executives say they need these changes to remain competitive against larger national insurers. Rep. John Bradford, the bill’s lead sponsor in the House, said under current law Blue Cross is at a disadvantage compared to for-profit competitors, in part because Causey's office has to approve investments before they're made.

That can take more than a month, Bradford said, and companies like Aetna and UnitedHealthcare can move much faster.

But the law also caps Blue Cross’ reserves, requiring the company to refund customer premiums if they cross that threshold. Causey said Monday that the company is near the cap and that he sees “this bill as a tool to allow them to circumvent that legislation” by moving money out of the state Department of Insurance's regulatory reach.

“If they’re paying million-dollar bonuses to executives every year … when we’re looking, what can they do when we’re not looking?” Causey said.

Bradford has said repeatedly that Causey’s concerns are overblown. The Mecklenburg Republican, who recently announced a 2024 run for state treasurer, said in a text message Monday that the bill “is a business regulatory reform piece of legislation and in no way undermines or dilutes the Commissioner’s regulatory and oversight authority of the insurance company.”

Causey’s concerns, though, are not with regulating the insurance company, but the holding company that would be above it. He described the bill as a way for Blue Cross to get around a law the General Assembly passed in 1998, after lawmakers rejected a Blue Cross proposal to become a for-profit entity. The legislature passed the state’s “conversion statutes” as a result, preventing the insurer from taking its assets out of state. This bill would roll back some of those rules.

The measure has widespread support among lawmakers. The House version, set for a committee hearing Tuesday, has more than 50 sponsors, including the chamber’s Republican majority leader, state Rep. John Bell, and the Democratic minority leader, Rep. Robert Reives. An identical Senate version of the bill, Senate Bill 296, has 35 sponsors in the 50-member chamber.

The company is a major campaign donor for state lawmakers, and its political action committee gave legislative campaigns nearly $260,000 last year, according to State Board of Elections records.

Gov. Roy Cooper has not yet taken a public position on the bill. His press office didn’t’ immediately respond Monday to a request for comment. A coalition of progressive groups, including the N.C. Justice Center, published a letter to the governor Monday, asking him to oppose the bill.

Blue Cross said it disagreed with the groups' characterization of the bill and referred to the Republican insurance commissioner and the liberal Justice Center as "allies" who are "asking for even more burdensome regulations that would raise costs and make conditions less favorable for consumers.

"We want to expand access and services to North Carolinians — this legislation is the solution," the company said in a statement. "We want to maintain our unique not-for-profit mission and status — this legislation is the solution. We don’t want to convert to a for-profit company — this legislation is the solution."