A group of union workers and consumer advocates asked Pennsylvania's Commonwealth Court to overturn a recent decision by the state Insurance Commissioner M. Diane Koken allowing the state's four not-for-profit Blue Cross and Blue Shield plans to keep $4 billion in combined reserves. The petition asserted that Koken's decision last month contradicted a standard set more than a year ago when the department notified Independence Blue Cross, Highmark, Capital Blue Cross and Blue Cross of Northeastern Pennsylvania that they must justify surpluses and make plans to refund excess amounts to members through premium reductions. The petition also alleged that Koken's ruling was part of a backroom deal between the Blues plans and the governor's office.
Koken ruled that the plans' surpluses were in line with amounts needed to ensure their solvency. Her decision came two days after Gov. Edward Rendell unveiled an initiative in which the Blues plans agreed to donate $1 billion to community healthcare programs over six years. Koken has denied critics' claims that the deal influenced her decision. Since the ruling, state lawmakers have introduced legislation that would limit the Blues plans' reserves to three months of claims payments. -- by Laura B. Benko