Letter: Blue Cross of Rhode Island Turns to Subscribers To Pay Its Corruption Fine

Bitter denunciations of monopolistic greed poured from the podium at a public hearing in Providence on January 17th. Subscribers in the “direct pay” class of Blue Cross/Blue Shield of Rhode Island hoped these words would block a rate-increase request filed with the state Health Insurance Commissioner in November, 2007. If the commissioner approves the request, as many fear he will, subscribers will face an average rate increase of 12.7 percent in their monthly premiums.

Rhode Islanders traveled on one of the coldest nights of the winter to attend the hearing in downtown Providence.  Following opening arguments from the Blue Cross attorney and then the assistant state Attorney General, a Blue Cross subscriber and attorney by profession was the first to speak. Testifying on the excessive costs of health care for himself and his family, as well as the rising cost of food, gasoline, and heating oil, the speaker demonstrated the hardship he and his family would suffer if rates were to increase. The men and women who followed him testified to the same troubles, and in words of desperation, disgust, and outrage, implored the commission to deny the rate increase.

“At the trough” was one of the colorful metaphors invoked by the first speaker, and borrowed by later speakers, to describe the gluttony of the insurance company. A woman who has been a Blue Cross insurance payer for over a decade summarized her years of dissatisfaction with the company and concluded that her “health plan” was simply “a rip-off.” A retired worker testified to the monopoly status of Blue Cross in Rhode Island. It is the only insurer to offer individual plans to the self-employed, or to those whose employers do not pay and must therefore pay themselves. Frustration with the commission itself, which has a record of bowing to the insurance company, was high. One of the last speakers accused the commissioner of being a fraud who serves Blue Cross instead of Rhode Island insurance payers.

Compounding the shamelessness of the rate proposal is Blue Cross’s admitted involvement in the bribing of Rhode Island state legislators since the 1990s. The company has accepted responsibility for making illegal contributions to members of the General Assembly between 1997 and 2003. Those contributions, of course, came directly from subscribers who pay every month for services often denied them. Blue Cross has escaped federal prosecution only by signing an agreement with U.S. Attorney Robert Clark Corrente in December, 2007. Under its terms, Blue Cross will pay a $20 million fine to a state foundation, and agrees not “to seek any rate increases specifically to recoup the $20 million.” Though the filing predated the formal agreement with the U.S. Attorney, Blue Cross had known for months that it was facing a heavy fine of an indeterminate amount. It is no coincidence that the rate increase proposal was made last fall.

The state-granted privilege of a major corporation to recover lost profits – at consumers’ expense – is by no means confined to the “healthcare” industry.  The Public Utilities Commission of Rhode Island indulged the state electricity provider, National Grid, with permission to raise rates by 5.2 percent as of January. Verbal protest by citizens did not sway the commission from its decision.  National Grid, of course, hid the face of its greed behind the mathematical proof that the rising cost of raw materials would diminish its revenue if the rate paid by consumers remained the same. Perhaps the commission was impressed by this logic.

But what of the men and women who, each weekday, sell their labor, time and skill for wages that only barely meet their needs? Does state government extend the same helping hand to wage earners by adjusting wages for the rise in prices?

A.B. Blunt in Providence, RI