Boards of Nonprofit Insurers: High Paid and Well Connected

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March 4, 2011; Source: Boston Globe | What do all four Massachusetts nonprofit health insurance companies pay their trustees? The practice at Blue Cross of Massachusetts came to light last week when it was revealed that the severance package for a former CEO topped $11 million. But Harvard Pilgrim Health Care, Tufts Health Plan and Fallon Community Health Plan also pay their trustees.

What’s more, Blue Cross of Massachusetts does not just pay their trustees upwards of $90,000 but it also heavily subsidizes their health care.

Attorney General Martha Coakley has asked all four of these companies to justify the payments but reportedly she is unhappy with the responses to date. Brian McGrory of the Boston Globe breaks down why trustee payments are a problem in what is a decidedly high stakes and very political situation. “In paying the outrageous director fees, these providers are putting tens of thousands of dollars into the bank accounts of key decision makers all over Boston – money being a time-proven lubricant to an awful lot of good will. All this is set against the backdrop of our governor launching a discussion about containing health care costs in a state where health care is a dominant industry.”

Massachusetts clearly has a responsibility to ensure that all components of its high profile health care system are working optimally, not just for its responsibility to its own subscribers but because it is a model as we creep closer to the implementation of national health care reform. The role and regulation of nonprofit insurers in that system is due the scrutiny it is now getting.

We hope the AG and media keep the heat on.—Ruth McCambridge