The lawsuit states they “broke the law” by acting like a for profit organization and shifting funds to buy a California insurance company. It appears as if Blue Cross operates similar to an assigned risk carrier as they cannot deny coverage as long as the patient pays, unlike out here in California, but no taxes is a big break for any company these days. “Blue Cross is "losing its way" by increasingly venturing into for-profit activities, Cox said.”
The legislature is also considering another source for assigned risk patients. It does make you wonder how much money from the insurance companies goes to finance interests outside of what one could think is the normal realm of operation for a carrier, and as stated before some carriers are opening up new ventures in China, so how much capital is needed for those up and coming locations? BD
LANSING, Mich. - Attorney General Mike Cox on Wednesday sued Blue Cross Blue Shield of Michigan and accused the state's largest health insurer of breaking the law when it shifted $125 million to help buy a workers' compensation insurance company. The lawsuit filed in Ingham County alleges that nonprofit Blue Cross, based in Detroit, illegally helped the Accident Fund, its for-profit subsidiary in Lansing, purchase a California insurance company in November. "This is not what a charitable and benevolent institution was set up to do," Cox said during a news conference, referring to Blue Cross' unique role in Michigan's health system. It's exempt from state taxes in exchange for being the insurer of last resort, meaning Blue Cross can't deny any customer health insurance as long as the customer pays for it.
Michigan AG sues Blue Cross over for-profit deal -- chicagotribune.com
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