North Carolina Gov. Roy Cooper signed into law on Saturday a bill allowing the state's leading health insurance provider to reorganize despite pleas from other executive officials to block the proposal.
The new law, which passed the GOP-controlled General Assembly with overwhelming bipartisan support, permits Blue Cross and Blue Shield of North Carolina and a dental insurance provider to transfer assets into a parent holding company that the state insurance commissioner warned would be able to move money with little oversight. The law takes immediate effect.
"Our goal is comprehensive health insurance with access to care in every county of our state at the most affordable cost possible, and this legislation with consumer protections in place aims to keep the company strong while continuing its commitment to its North Carolina home," Cooper said.
If Cooper had opposed the measure, however, there may have been little he could have done to stop it. Republicans have held veto-proof majorities in both legislative chambers since a Democratic state lawmaker switched parties two months ago.
Blue Cross, the state's dominant insurance provider, and Delta Dental are now permitted to transfer money, property and other investments from their existing hospital service companies to new shell companies run by the same executive leadership.
State Insurance Commissioner Mike Causey spoke against the measure as it moved through the legislature, arguing it would limit his regulatory authority to make sure the holding company acts in the best interest of consumers.
Blue Cross, a fully taxed nonprofit, had argued the reorganization would give it more flexibility to compete with its for-profit rivals and expand its services to more communities. Spokesperson Sara Lang applauded the governor and the General Assembly Saturday for passing bipartisan legislation that she said would help the insurer "address the growing health care needs of our state."
"Blue Cross NC will continue to listen to and support the communities we serve, looking at ways to bring the right solutions and meaningful partnerships to support our customers and our state's economy," she said in a statement.
The law requires the holding company to invest in entities that promote affordability or "contribute to the health needs of North Carolina residents." It also caps the amount of "admitted assets" the insurer can transfer to the holding company at 25%.
The holding company must also file annual audited financial statements with Causey's office, disclose compensation for its highest-paid executives and reveal its "strategic investment activities."
But Causey said Blue Cross still has plenty of flexibility under the law to use money that he said belongs to North Carolina ratepayers for personal gain.
He and State Treasurer Dale Folwell took the unusual step during Tuesday's public Council of State meeting to plead directly to Cooper to halt the current measure and consider amendments that Folwell said were needed to protect consumers.
"I'm still hearing from people across North Carolina that are very concerned about that bill," Causey told the governor. "In my opinion, it did not have a fair hearing in both chambers because of the pressure that Blue Cross put on it politically to get it pushed through."
Blue Cross is an influential player at the General Assembly, where it has more than a dozen registered lobbyists. Its employee PAC gave over $250,000 to legislative campaign committees in 2022, according to reports filed with the State Board of Elections.