PRINTER'S NO. 733
No. 112 Session of 2003
INTRODUCED BY CURRY, BEBKO-JONES, BELARDI, BELFANTI, BROWNE,
CAWLEY, CRUZ, DeLUCA, EACHUS, FLICK, FRANKEL, GEORGE,
GOODMAN, GRUCELA, HARHAI, HENNESSEY, HORSEY, JOSEPHS,
LEVDANSKY, MACKERETH, MELIO, MUNDY, PALLONE, PRESTON,
SOLOBAY, SURRA, THOMAS, TIGUE, WALKO, WANSACZ, WASHINGTON AND
YOUNGBLOOD, MARCH 4, 2003
REFERRED TO COMMITTEE ON RULES, MARCH 4, 2003
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
17 billion last year and still have met minimum reserve levels set
1 by the Insurance Department; and
2 WHEREAS, The three companies have raised premium rates an
3 average of 10% to 15% annually in recent years while, at the
4 same time, reimbursement rates to hospitals and physicians have
5 stagnated in many cases and gone down in still others; and
6 WHEREAS, These companies, because of their nonprofit status,
7 are exempt from paying the 2% insurance premium tax; and
8 WHEREAS, The mission of these companies is to be "charitable
9 and benevolent" institutions; and
10 WHEREAS, Excess surpluses defy this mission as well as
11 nonprofit laws in this Commonwealth; therefore be it
12 RESOLVED, That a select committee of the House of
13 Representatives be created for the purpose of investigating the
14 surpluses of Independence Blue Cross of Philadelphia, Highmark,
15 Inc., and Capital Blue Cross of Harrisburg; and be it further
16 RESOLVED, That the select committee be composed of 15 members
17 as follows:
18 (1) Eight members appointed by the Speaker of the House
19 of Representatives.
20 (2) Seven members appointed by the Minority Leader of
21 the House of Representatives;
22 and be it further
23 RESOLVED, That the select committee may hold hearings and
24 take testimony at such places as it deems necessary in this
25 Commonwealth; and be it further
26 RESOLVED, That the Insurance Committee and the Appropriations
27 Committee assist the select committee to the fullest extent
28 possible; and be it further
29 RESOLVED, That the ordinary and reasonable expenses incurred
30 by the select committee, including contracting for specialized
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1 services, be paid from accounts under the control of the Chief
2 Clerk; and be it further
3 RESOLVED, That the select committee report its findings and
4 recommendations no later than May 30, 2003, to the House of
5 Representatives.
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