Montana’s Attorney General announced Friday the proceeds from the sale of Blue Cross Blue Shield of Montana to a larger, out of state, insurance company will be used to create the “Montana Healthcare Foundation.”
As Mike Dennison of Lee Newspapers reports, Attorney General Tim Fox and Commissioner of Securities and Insurance Monica Lindeen approved the more than $40 million sale of BCBS-MT to the Chicago-based Health Care Service Corporation earlier this week. BCBS-MT’s approximately 250-thousand customers in the state should not experience an immediate change in their coverage and Lindeen’s office said the company will retain the Blue Cross Blue Shield name under its new ownership.
In a press release, Fox’s office said state law requires the proceeds from the sale be directly distributed to a non-profit foundation whose mission will be as close as possible to that of Blue Cross Blue shield. BCBS’s mission is basically to improve quality and awareness of and access to healthcare services for Montanans.
The foundation will operate as a 501(c)(3) non-profit charity. Fox is appointing former dean of the University of Montana School of Law E. Edwin Eck as the initial, interim trustee. Eck will oversee the initial transfer of money from the BCBS sale and will form a search committee to appoint the foundation’s eventual board of directors. Once the board is formed, Eck’s responsibility with the foundation will end as well as that of the Attorney General’s office.
“By law, the foundation cannot be an agent or instrumentality of government," Fox said.
As such, it’s unclear at this point what the foundation will actually do. It will be under the same state scrutiny as any other nonprofit, but that is where government oversight ends. The independent board of directors will decide how to fulfill the requirements of its mission statement using the funds provided.
On top of the initial $40 million, which the foundation should be receiving in the next 60 days, other assets from the dissolution of BCBS-MT will eventually end up there. These could total more than an additional $150 million, according to Fox’s office.
Fox said Healthcare Service Corporation has been in negotiations on the BCBS sale with state regulatory agencies for 8 months. HCSC agreed not to cut the jobs of BCBS-MT’s 450 employees, instead agreeing to add 100 additional jobs in Montana. The company will also now pay state premium tax, which BCBS did not formerly pay.