Wednesday, April 8, 1998 | 3:41 a.m.
State Insurance Commissioner Alice Molasky-Arman said Gem Health Care was shut down two weeks ago. Her staff was able to reach an agreement with Blue Cross Blue Shield, which will provide health care coverage to Gem's 8,000 remaining Nevada customers.
"Some of these people had uninsurable pre-existing conditions," she said. "They were people who would not have been able to obtain coverage."
For three years, Gem had been selling insurance below its authorized minimum rates. Molasky-Arman told a legislative committee Tuesday that she believed that the company was "lowballing" rates to attract customers.
"Once they got them, they were ready to impose excessive premiums," she said. "They bought themselves a market."
Gem sought an 80 percent rate increase last year, far more than the maximum allowed 30 percent.
"When we couldn't approve the exorbitant increase, they said they would withdraw from the state," she said.
Molasky-Arman's agency must approve rates that allow companies at least to cover their costs.
While the Insurance Division has not imposed sanctions against Gem, a Utah-based company, Molasky-Arman said that option is under consideration.
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