THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Tuesday, September 10, 1996 TAG: 9609100299
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY TOM SHEAN, STAFF WRITER
LENGTH: 57 lines
Trigon Blue Cross Blue Shield sought to disarm its 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 raised questions 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 at present,'' said Paul M. 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 9:30 a.m. today. Norwood Davis, Trigon's CEO, is scheduled to testify in favor of the plan.
Richmond-based Trigon, which is currently owned by its policyholders, has said it must gain access to the stock market to raise additional capital for expansion. Trigon policyholders approved the conversion plan at a special meeting last Friday, but the company also needs the SCC's approval before embarking on the change in ownership.
Health care consultants testifying on Trigon's behalf told the SCC that the company is under pressure to raise capital because much 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 W. 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 told the SCC.
But commission chairman Theodore V. Morrison Jr. questioned whether Trigon's expansion 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 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 shared distribution plan by not including individuals covered by their employers' policies. Under Trigon's plan they don't get any stock.
``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.'' by CNB