Assembly committee passes bill aimed at Blue Cross-Blue Shield

Thursday, May 27, 1999 | 10:18 a.m.

The measure is directed at Blue Cross-Blue Shield of Nevada, which merged in 1996 with Blue Cross-Blue Shield of Colorado. After the merger, the insurance company decided to transform itself into a for-profit company. The changeover is now in progress in Colorado.

In changing to a for-profit company, the value of the nonprofit business must be returned to the citizens of Colorado in the form of a charitable trust. The value could be as much as $200 million that could be used by nonprofit groups in Colorado for health care.

Jon Sasser, an attorney with Nevada Legal Services, has argued that part of the value of the company has come from the Blue Cross-Blue Shield business in Nevada, and that the Nevada share of the value should come back to the state. The amount could be anywhere from $8 million to $28 million, he said.

AB685 would require the attorney general to review the value of the company, now based in Colorado but still doing business in Nevada, to determine what portion is the result of Nevada operations. This amount would have to be paid to the state if the company wanted to continue to do business in Nevada.

Blue Cross-Blue Shield opposes the bill.

A similar measure that passed out of a Senate committee earlier this year was killed. SB12 passed the Senate Commerce and Labor Committee 4-3 but was left to die in the Senate on April 9, the deadline for action on the measure.

Jim Wadhams, a lobbyist representing Blue Cross-Blue Shield, said the value of the company is the result of the tax-exempt status in Colorado. The Nevada company, before the merger, never had such status and paid all applicable taxes, he said.

Wadhams also said it would be bad policy for the state to single out one company and pass a law after the fact seeking a share of the assets. Nevada should seek legal recourse in Colorado if it wants a share of the funds, he said.