DC APPLESEED RELEASES REPORT SHOWING THAT CAREFIRST REQUIRED BY LAW TO SPEND $50-$100 MILLION PER YEAR ON HEALTHCARE NEEDS IN THE NATIONAL CAPITAL AREA
The Billion-Dollar Company Currently Spending Only $1 Million--Not Meeting Its Charitable Obligation
The District of Columbia affiliate of CareFirst Blue Cross Blue Shield ("GHMSI") has departed from its federally imposed mission and charitable obligation to serve the healthcare needs of citizens of the National Capital area. The billion-dollar GHMSI is spending only approximately $1 million on charitable activities in 2004--less than one-tenth of one percent of its assets.
The report DC Appleseed released today shows that GHMSI could and should spend $40-$60 million today and, by 2008, possibly $100 million in carrying out its charitable mission. We believe that it is time for the company to immediately begin that undertaking.
With the support of expert analysis from Covington & Burling and Mathematica Policy Research, DC Appleseed reaches the following principal conclusions about GHMSI's legal obligation and financial capability:
- GHMSI is legally obligated to use its revenues and surplus to perform charitable activities in its service area.
- GHMSI is financially capable of engaging in charitable activities at a much higher rate than it is currently doing, and still remain a viable and competitive company.
- Using several conservative measurements, GHMSI could spend between $41 and $61 million on charitable activities in 2004. By 2008, GHMSI could spend between $67 and $100 million on charitable activities.
GHMSI has departed significantly from its charitable mission. The fact that it is only spending $1 million on charitable activities this year shows that it has not yet begun to return to that mission. It should now do so. A renewed commitment to charitable activities would greatly benefit many healthcare needs in the National Capital area and present no evident risk to GHMSI's competitive viability or financial soundness.
As reported in today's Washington Post and Baltimore Sun, District officials are supporting DC Appleseed's conclusions. DC Insurance Commissioner Lawrence Mirel told the Post that he hopes CareFirst will respond in "an open way" to DC Appleseed's study. "This report is designed to put pressure on them," Mirel said, "and I think it will have that effect."
The Board of Directors of both CareFirst and GHMSI are meeting this weekend, December 11-12, to make decisions about the companies' charitable activities for 2005.
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The DC Appleseed Center for Law and Justice is an independent non-profit advocacy organization whose staff works with volunteer teams of attorneys and other experts to identify serious local issues, research and analyze them, develop and publish recommendations for systemic reform, and advocate for appropriate solutions.
In addition to its lead-in-the-water project, DC Appleseed is currently working on initiatives addressing several of the most pressing issues facing the National Capital region, including: DC voting rights, access to quality health care for D.C. residents, restoration of the Anacostia River and its watershed, problems of special education in DC schools, the structural deficit in the DC budget, and the District's HIV/AIDS epidemic.
Thank you for your interest in DC Appleseed's work. Please visit our website to read more about what we are doing to improve the Washington metropolitan region.
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