PRINTER'S NO. 4069
No. 613 Session of 2002
INTRODUCED BY CURRY, D. EVANS, BELFANTI, LAUGHLIN, SHANER,
SURRA, TIGUE, WASHINGTON, G. WRIGHT, BARD, BEBKO-JONES,
CALTAGIRONE, CREIGHTON, DeLUCA, DERMODY, FRANKEL, FREEMAN,
GORDNER, GRUCELA, HANNA, HENNESSEY, HERSHEY, HORSEY, JAMES,
JOSEPHS, KREBS, MELIO, MUNDY, PISTELLA, ROBINSON, ROEBUCK,
RUBLEY, SCRIMENTI, STEELMAN, THOMAS, TRICH, J. WILLIAMS,
YOUNGBLOOD AND PALLONE, JUNE 20, 2002
REFERRED TO COMMITTEE ON RULES, JUNE 20, 2002
A RESOLUTION
1 Establishing and directing a select committee of the House of
2 Representatives to examine matters relating to the surpluses
3 of Independence Blue Cross of Philadelphia, Highmark, Inc.,
4 and Capital Blue Cross of Harrisburg.
5 WHEREAS, Independence Blue Cross of Philadelphia, Highmark,
6 Inc., and Capital Blue Cross of Harrisburg are nonprofit
7 corporations; and
8 WHEREAS, Independence Blue Cross of Philadelphia has a
9 reported surplus of $689.6 million, nearly 70% more than its
10 required reserve; and
11 WHEREAS, Highmark, Inc., has a reported surplus of $2.1
12 billion, 400% more than its required reserve; and
13 WHEREAS, Capital Blue Cross of Harrisburg has a reported
14 surplus of $616.4 million, 700% more than its required reserve;
15 and
16 WHEREAS, Those surpluses could have been reduced by $2.2
1 billion last year and still have met minimum reserve levels set
2 by the Insurance Department; and
3 WHEREAS, The three companies have raised premium rates an
4 average of 10% to 15% annually in recent years while, at the
5 same time, reimbursement rates to hospitals and physicians have
6 stagnated in many cases and gone down in still others; and
7 WHEREAS, These companies, because of their nonprofit status,
8 are exempt from paying the 2% insurance premium tax; and
9 WHEREAS, The mission of these companies is to be "charitable
10 and benevolent" institutions; and
11 WHEREAS, Excess surpluses defy this mission as well as
12 nonprofit laws in this Commonwealth; therefore be it
13 RESOLVED, That a select committee of the House of
14 Representatives be created for the purpose of investigating the
15 surpluses of Independence Blue Cross of Philadelphia, Highmark,
16 Inc., and Capital Blue Cross of Harrisburg; and be it further
17 RESOLVED, That the select committee be composed of 15 members
18 as follows:
19 (1) Eight members appointed by the Speaker of the House
20 of Representatives.
21 (2) Seven members appointed by the Minority Leader of
22 the House of Representatives;
23 and be it further
24 RESOLVED, That the select committee may hold hearings and
25 take testimony at such places as it deems necessary in this
26 Commonwealth; and be it further
27 RESOLVED, That the Insurance Committee and the Appropriations
28 Committee assist the select committee to the fullest extent
29 possible; and be it further
30 RESOLVED, That the ordinary and reasonable expenses incurred
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1 by the select committee, including contracting for specialized
2 services, be paid from accounts under the control of the Chief
3 Clerk; and be it further
4 RESOLVED, That the select committee report its findings and
5 recommendations no later than October 31, 2002, to the House of
6 Representatives.
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