MOUNTLAKE TERRACE – Insurance Commissioner Mike Kreidler has rejected Premera Blue Cross’ bid to become a for-profit company on the grounds that Premera’s transformation wouldn’t benefit policyholders or the public interest.
The decision comes after a nearly two-year application process by Premera, the state’s largest health insurer.
“I reached my decision following a careful consideration of the law and all the evidence,” Kreidler stated. “I’m confident that it is a fair and just decision.”
Immediately following Kreidler’s announcement at 10 a.m. this morning, a spokesman for Mountlake Terrace-based Premera said the company would review the insurance commissioner’s decision before commenting.
Under the state’s Holding Company Act for health insurance carriers, Kreidler holds the authority to decide whether Premera’s for-profit conversion plan met legal requirements.
Earlier this year, Kreidler presided over a hearing on Premera’s application at which the insurance commissioners staff members recommended rejection of the conversion.
But Premera spokesman Scott Forslund said at that time he believed the company presented a good case. The nonprofit insurer argued that being allowed to become a for-profit company with stockholders would help Premera raise money to invest in technology and patient services. The company also promised to start a foundation to provide up to $500 million for public health programs if its conversion was accepted.
Opponents included a coalition of groups representing hospitals, doctors and consumers. They contended, as Kreidler also concluded in today’s decision, that the conversion is more likely to hurt customers than help them.
Premera, which insures close to 1 million people in Washington and Alaska, is believed to be Snohomish County’s largest privately held company and is one of its largest employers.
Reporter Eric Fetters: 425-339-3453 or fetters@heraldnet.com.
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