JEFFERSON CITY - Efforts to pass legislation that would allow Blue Cross and Blue Shield of Kansas City to "go public" were stifled by three hours of debate on the Senate floor Tuesday (April 23).
The $320 million company is a non-for-profit holding company that has received non-for-profit tax breaks for several decades.
Now, the company wants to move 20 percent it's assets into a profit-making effort. The remaining 80 percent of the company will still be owned by the non-for-profit holding company.
One of the most outspoken opponents to the bill, Sen. John Schneider, D-St. Louis County, suggested Blue Cross and Blue Shield is trying to rip off the public by keeping tax benefits received from the government while operating as a non-for-profit group.
"They took advantage of a kind public that reached into its pockets and ... handed over tax benefits. I want that money back and so does the public," Schneider said in Tuesday's floor debate.
Consumer and welfare groups say that if Blue Cross is allowed to use funds it collected as a tax-exempt company to raise more capital, then the company should be required to give money back to the public.
"Every cent, every brick, every advent gained over 60 years because of the public belongs to the public," said Peter DeSimone, lobbyist for Missouri Association for Social Welfare.
The state Insurance Department, which also opposes the measure, maintains companies should be required to give money to groups that provide insurance to the underprivileged, said Randy McConnell, a spokesman for the department. That was the original mission of Blue Cross and Blue Shield, McConnell said.
Another reason the department is opposed to the measure is because it would narrow the discretion of the department chair in monitoring the company's actions, McConnell said.
Blue Cross and Blue Shield could layoff 800 people if the legislation is not passed, said Tom McCarty, a lobbyist for Blue Cross and Blue Shield. McCarty said the company wants some action taken soon, otherwise it could begin eliminating jobs this summer, McCarty said.
"If we don't get some kind of relief, we could eventually just dry up and blow away," McCarty said.
Blue Cross and Blue Shield of St. Louis became profit organization two years ago, a move that has sparked debate in the insurance industry. Now, Blue Cross and Blue Shield of Kansas City is stuck a "logjam" because of the state Insurance Department, said Phillip Curls, D-Kansas City, the bill's sponsor.
Curls said his measure is simply an attempt to level the playing field between the Kansas City and St. Louis companies.
This has been an issue in several states including California as health insurance companies aim to reorganize to become for-profit organizations.
Missouri Senators did not take a vote on the measure before moving it to the informal calendar.