ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Tuesday, September 10, 1996 TAG: 9609100056
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
DATELINE: RICHMOND
SOURCE: TOM SHEAN LANDMARK NEWS SERVICE
SOME POLICYHOLDERS worry their premiums will go up and benefits drop after the health insurer becomes a stock-owned company.
Trigon Blue Cross Blue Shield sought to pacify critics Monday by assuring state regulators that its health insurance will remain widely available even after becoming an investor-owned company.
In the first day of hearings before the State Corporation Commission, consumer advocates, individuals and business representatives asked about the future of Trigon's coverage and its method of distributing stock to its policyholders.
``As a policyholder, I am much more worried about the continued availability of reasonably priced Trigon policies with benefits similar to those I have now,'' said Paul Boynton, executive director of the Eastern Virginia Health Systems Agency Inc. in Norfolk.
``I question whether it is in the interest of policyholders or the public in general to have a situation which could easily lead to higher premiums, reduced benefits and reduced choice among plan types,'' said Boynton, whose agency monitors health care facilities in southeastern Virginia.
The SCC hearing resumes at 9:30 a.m. today. Norwood Davis, Trigon's CEO, is scheduled to testify in favor of the plan.
Richmond-based Trigon, which is owned by its policyholders, has said it must have access to the stock market to raise money for expansion. Trigon policyholders approved the conversion plan at a special meeting last Friday, but the company needs SCC approval before changing to a shareholder-owned company.
Health care consultants testifying on Trigon's behalf told the SCC the company must raise capital because larger health care providers have been moving into Virginia and neighboring states.
``This market, along with other parts of the mid-Atlantic and Southeast, has become a major hot spot for mergers and acquisitions,'' said Donald Moran, a Fairfax health care consultant.
``Within 18 to 24 months, virtually every salable asset in this market and in surrounding states will be aligned with someone,'' Moran said.
But commission Chairman Theodore Morrison questioned whether Trigon's plans addressed consumers' frustrations with the paperwork and restrictions on coverage. Exhausted from making numerous phone calls seeking help, many consumers end up paying for health care out of their pockets, he said.
Representatives of the attorney general's office and the SCC's Bureau of Insurance told the commission that Trigon's plan for converting to an investor-owned company complied with Virginia law.
As part of the conversion to a company with publicly traded stock, Trigon plans to distribute more than 60 million shares to its policyholders.
Jean Ann Fox, president of the consumer advocacy group Virginia Citizens Consumer Council, criticized the share distribution plan for not including individuals covered by their employers' policies. Under Trigon's plan they don't get any stock; only their companies are considered policyholders.
``Trigon's plan is unfair to many consumers,'' Fox said ``It gives no recognition of the contributions of profits or success made by the 1.6 million Virginians who are served by Trigon but not considered eligible policyholders by the company.''
LENGTH: Medium: 64 linesby CNB