Colorado insurance department auditors are looking into the possibility that the state Blue Cross and Blue Shield plan financed loans to neighboring plans in Nevada and New Mexico by inflating the premiums of Colorado policyholders.
Regulators claim to have uncovered surplus loans, which total more than $23 million, during a routine, triennial audit of the Blues. That audit should be completed in May.
But a spokesperson for the Rocky, Mountain Health Care Corp., which manages the three plans in question, said the loans have been noted on filings with the Colorado department since 1987, the year the three affiliates first came under joint management and when the first loan was made.
The investments were intended to improve the financial outlook for the New Mexico and Nevada Blues, said Carl Miller, who represents all three plans as legislative and media director. That ultimately accrues to the benefit of Colorado's 400,000 Blues policyholders who gain access to such things as streamlined systems that are available through the New Mexico plan.
The loans in no way damaged policyholders, Mr. Miller said.
Concerns remain in Colorado, however, particularly about the impact that RMHCC's attempted merger of the three plans might have on Colorado subscribers, said Jake Gaffigan, public information chief with the Colorado department.
'The Colorado plan is set up as a not-for-profit corporation to benefit the policyholders of Colorado,' he said. 'We're concerned that [merging the three and] using the Colorado plan to assist other state plans would not be beneficial, particularly if those plans were operating at a loss.'
Mr. Miller acknowledged the Colorado department's concerns, but noted that the benefits of regionalization far outweigh the costs. 'The future of our system is going to be these affiliations across state lines and among plans,' he said. '[It improves] our ability to position ourselves as likely winners as the government consolidates the processing of programs, [and] that means value is brought to Colorado.'
