What the Blue Cross Blue Shield bill is really about

It's about money: $4.6 billion in cash. But it's also about the role this company should play in our state.

Insurance Commissioner Mike Causey is not the most vocal politician in the state.

So it was a noteworthy surprise for Causey to hold a press conference last week hoping to slam the brakes on a bill speeding through the General Assembly with broad support.

The short version is this: Blue Cross Blue Shield of North Carolina, the state’s largest and most powerful health insurance company, is pushing a bill that would fundamentally change its structure and relationship with the government.

The bill is about money, mostly. But it’s also about what role a homegrown nonprofit should play in our state.

It’s a fairly nuanced issue, but it’s not getting the open and honest debate that it deserves. Here’s what you need to know about the bill.

Photo courtesy of Blue Cross Blue Shield of North Carolina

What this bill does

House Bill 346 is pretty technical in its details, but it’s actually fairly simple. The bill seeks to change how Blue Cross can manage its $4.6 billion — and growing — in reserve cash.

Under the status quo, the company can't amass much more than that without triggering laws requiring it to cut rates or send refund checks to customers. But Blue Cross wants the ability to use that money to make investments it says will help it better compete with insurance giants like Aetna and UnitedHealthcare.

In Causey’s press conference, he said the bill allows BCBSNC side-step regulations and would let them raise rates higher than they would otherwise.

“My concern is that North Carolina money will be used for investments that won’t benefit North Carolina,” he said. “As a nonprofit company, Blue Cross North Carolina is very much an asset of North Carolina … I just hope that we can convince our legislators to slow this bill down and take a hard look at it.”

But Rep. John Bradford, a Mecklenburg County Republican and one of the chief advocates for the bill, said it's simply about letting Blue Cross better compete in the modern health insurance arena.

“They’re a mission-driven organization, and they’ve been characterized as having corporate greed. I think that is unfair in a big way and a mischaracterization at the highest level,” Bradford said Wednesday, as reported by Carolina Journal. “This is a business regulatory reform bill. … I believe in equality for businesses to compete, and that’s what we’re trying to do.”

Why this matters

Depending on how you slice the data, Blue Cross Blue Shield of North Carolina has either a 55% or 80% market share in North Carolina. In many rural parts of the state, BCBSNC is a person's only option when it comes to health insurance. So it's worth taking a step back briefly to consider how it got there.

Blue Cross Blue Shield of North Carolina dates back to the early 1930s, starting as a voluntary association that allowed families to set aside money every month for future hospital bills. The company came under the purview of the General Assembly in 1941, and it has remained a nonprofit to this day. This has given it significant tax advantages but also comes with strings attached — like the reserve cap we mentioned earlier.

These organizations were fully tax-exempt until the 1980s, but now pay corporate income taxes. In some states, Blue Cross organizations have converted to for-profit companies. That hasn't happened here, and BCBSNC says it wants to remain a nonprofit. But the company has regularly pushed for more freedom to operate like a for-profit, and this bill is just the latest example.

As a reflection of that, the General Assembly passed a law in 1998 that would require Blue Cross Blue Shield to set aside a giant pot of money — the amount of its market value — into a foundation for public purposes should it convert to a for-profit or otherwise change its structure. It was essentially a “poison pill” to keep Blue Cross a state-focused nonprofit.

This new bill represents a significant reversal in how the General Assembly views Blue Cross Blue Shield of North Carolina. It would essentially allow Blue Cross to circumvent that 1998 law.

It’s a reflection of how powerful and politically connected Blue Cross has become. The company gives generously to candidates on both sides of the aisle, and its board includes political powerhouses from across the state. All sides agree that the company essentially wrote the bill and is pushing it through the process.

The bill also lays bare the divisions between big-business Republicans and more populist conservatives skeptical of corporate influence. And it represents yet another issue this session in which establishment Republicans and Democrats are pushing legislation across the finish line against opposition from both the left and right.

Why it’s controversial

Over the past decade, the prevailing narrative has been that of a Republican majority working cohesively to pass legislation over unified Democrat opposition. And to be sure, there have been plenty of party-line votes.

But there have been a surprising number of issues, particularly this session, that have the support of leadership in both parties, but opposition among small numbers on both the left and the right. Medical marijuana and sports gambling are examples, and this Blue Cross bill is another.

There's a real difference in vision between the two sides of this bill.

On the one side, supporters of the bill see Blue Cross Blue Shield of North Carolina as an important player in a national industry and are sensitive to the company's concerns about being hamstrung in the market. 

Then on the other side, you have people who remember the company's roots and see it as a nonprofit with a special purpose and special responsibilities.

I honestly see merit in both sides, and there's a good faith argument to be had in both directions.

So, should it pass?

This bill seems almost certain to pass. The House voted overwhelmingly in favor of it, 88-26. The Senate version of the bill counts powerful figures like Sen. Ralph Hise (R-Mitchell), Sen. Jim Perry (R-Lenoir) and Democratic Leader Sen. Dan Blue as co-sponsors.

Gov. Roy Cooper has yet to take a public position on the bill, though Causey said he’s been told that the governor is on board.

However, the speed at which this bill is moving is troubling. It rushed through House committees and to the floor in a matter of days, with only a few minutes dedicated to discussion, public comment and debate. For that reason alone, I would have voted “no.”

It’s worth slowing down and fully understanding the reasoning behind the bill, not just the corporate spin.

Blue Cross Blue Shield of North Carolina has a special role in the state, and with that comes special responsibilities. It’s not a typical big business, and the state has given it plenty of support over the past eight decades.

Perhaps this bill is necessary to keep it strong enough to effectively serve North Carolinians. But legislators should take a skeptical approach and demand clear and public answers to how this bill would benefit the people of North Carolina.

5 things of note

New Supreme Court restores voter ID in North Carolina

What’s happening: The new Republican majority on the state Supreme Court has overturned prior court rulings invalidating the state’s voter ID law. In 2018, the voters of North Carolina approved an amendment to the state constitution requiring photo identification to vote. The following year, the General Assembly passed legislation to implement it, carving out exceptions for extreme cases and providing for photo IDs to be issued to people who don’t have one.

Liberal groups sued to block implementation, and in 2021 the then-Democrat majority on the Supreme Court ruled along party lines that voter ID violated the state constitution.

In this new opinion, the court found that there was not ample evidence that the law was created with discriminatory intent or that it would have disparate impacts based on race.

Why this matters: While this is a big win for the significant majority of North Carolinians who support voter ID to shore up the integrity of our elections, it’s also a reflection of a new court majority that will stick to the letter of the law, not judicial activism.

“[E]ven in the most divisive cases, we reassure the public that our state’s courts follow the law, not the political winds of the day,” Justice Phil Berger Jr. wrote in the majority opinion.

What comes next: More than likely, voter ID will be a requirement for the upcoming 2024 elections. However, the specifics are far from certain, and there is a lot of wrangling that will need to happen between now and then to decide them, both in the court system and at the State Board of Elections. The Democrat-controlled board will likely try to water down ID requirements as much as possible, while liberal groups will try other avenues to end voter ID once again.

Supreme Court returns power to legislature on redistricting

What’s happening: On the same day as the voter ID ruling, the state supreme Court also published a new opinion on redistricting that gives the legislature broader leeway to draw districts with partisan goals in mind.

For much of the last decade, the Republican majority in the General Assembly has been tied up in legal battles over its congressional and state legislative districts. The previous Democrat majority on the Supreme Court ruled that “partisan gerrymandering" — or drawing districts that favor one political party — violated the state Constitution. The U.S. Supreme Court has found that partisan gerrymandering does not violate the U.S. Constitution, either.

Last year, the court actually redrew Congressional lines itself to benefit Democrats, rejecting a map with several toss-up seats in favor of a map that carved out more safe seats for Democrats.

“Policy decisions belong to the legislative branch, not the judiciary,” Chief Justice Paul Newby wrote in the majority opinion.

Why this matters: For the first time in more than a decade, voters in North Carolina may have some certainty that their districts won’t change every election cycle.

What comes next: The General Assembly is now specifically authorized to redraw both the Congressional and state legislative districts for the 2024 elections. Look for significantly different maps that will elect more Republicans in both the U.S. Congress and General Assembly.

Mark Robinson talks Day 1 priority, takes first real swipe at Josh Stein

What's happening: In one of his first public interviews since launching his campaign for governor, Lt. Gov. Mark Robinson laid out what he'd do on his first day as governor and took his first jab at his presumptive opponent next year, state Attorney General Josh Stein.

He told WBT in Charlotte that after being sworn in as governor, he'd immediately begin calling sheriffs and law enforcement heads from across the state and invite them to Raleigh.

“They're all coming to the mansion, and we're going to have a press conference and tell the people of North Carolina that law and order is back in style in this state,” Robinson said. “We're not going to tolerate the crime that we're seeing all around this country. We're not going to tolerate all the crime we're seeing in some of our major cities around here. We're going to make sure that here in North Carolina people are safe and secure ... and the men and women in blue will be supported from the very top.”

Robinson also answered questions about how he responds to criticisms that he doesn't have the temperament to win the governor's race and that he holds “extreme” views. 

“Sometimes it just takes one person to speak up and say what everybody else is thinking,” Robinson said. “They might not adopt your ideas, they might not necessarily agree with you, but it gets the conversation started in earnest. When good folks with good intentions get the conversation started in earnest, they always find great solutions.”

Robinson has largely avoided discussing Stein, there was no mention of him at Robinson's kickoff rally earlier this month. That's significantly different from how Stein has approached the race, focusing overwhelmingly on Robinson. However, when asked by WBT about Stein, Robinson made his first tepid swipe at the attorney general.

“He's been an ineffective attorney general. He hasn't stood up for the people of North Carolina," Robinson said. “He hasn't stood up for law and order in this state, and I doubt that he'll do it if he's governor. All that stuff he's saying is going to fall on deaf ears.”

Why it matters: These early days of Robinson's campaign provide insights into how he's going to handle key issues as the race heats up. 

What comes next: I don't think Robinson's response to the Stein campaign's attacks will be particularly effective. He'll likely need to go back to the drawing board to come up with a way to counter the millions in attack ads that will come his way.

Congressman Dan Bishop considering run for state attorney general

What's happening: U.S. Rep. Dan Bishop is considering a run for North Carolina attorney general in 2024, according to the Do Politics Better podcast. The Charlotte Republican was until 2020 a state senator but has quickly gained a national profile for his conservative stances on national issues. Bishop was one of the few to hold out approval for House Speaker Kevin McCarthy to extract concessions. 

Why this matters: It would be a highly interesting — and unconventional — move for Bishop to run for attorney general. Typically, these candidates tend to be district attorneys or state legislators. Should Bishop jump in the race, it would likely be a reflection of two things.

One, it signals a greater emphasis on the part of the Republican Party on the attorney general seat. It's been in Democratic hands for almost the entirety of the last century and is a convenient springboard to the governorship. Two, it may also foreshadow a new Congressional map in the works that may not have room for Bishop. His seat changed dramatically in 2022 under court order, actually cutting out Bishop's home.

What comes next: Bishop's entry would be a big deal in reshaping that race. Former state legislator Tom Murry has already declared his candidacy and has steadily gained support. Bishop is a tough campaigner and one of the more popular conservative figures in the state. 

Two more potential 2024 candidates

• Wilkes County Republican state Rep. Jeffrey Elmore is reportedly considering a run for lieutenant governor, again per the Do Politics Better podcast. Elmore is a public school teacher and previously served as a town commissioner in his hometown of North Wilkesboro.

• Charlotte city councilman Braxton Winston declared his candidacy for Commissioner of Labor. Winston rose to prominence as an activist during the Black Lives Matter protests of 2016 and is best known for his criticism of police and far-left stances on most issues.

1 good idea from another state

Oklahoma education superintendent creates big sign-on bonus for new teachers

Oklahoma education Superintendent Ryan Walters has created a new program that offers teachers starting work in his state a sign-on bonus of up to $50,000, the Tulsa World reports. Beginning teachers in hard-to-fill areas like special education would be eligible for bonuses of $15,000. The biggest bonuses would go to experienced teachers coming from out of state. Teachers would need to commit to teaching in Oklahoma for at least five years to qualify. Oklahoma is spending $16 million in federal money on the program.