- The Washington Times - Monday, August 12, 2002

RALEIGH, N.C. (AP) Blue Cross and Blue Shield of North Carolina, eager to become a profit-making company after 69 years as a nonprofit, appears stuck among regulators, consumer groups and the group that controls its trademark and name.
At issue is the post-conversion relationship between the state's largest health insurance company and the new, independent health care foundation that would be created.
A 1998 state law requires that if Blue Cross turns itself into a for-profit company, it must pay back the decades of tax breaks it has received as North Carolina's nonprofit insurer of last resort. To do that, it must turn over 100 percent of its stock to the new foundation, which immediately would become one of the state's largest charities.
The foundation's purpose will be to improve the health care of North Carolinians.
In a sharply worded memo issued Friday, legal advisers to the state Insurance Department said Blue Cross was backsliding from informal outlines for establishing the foundation offered in June.
Blue Cross' most recent draft of the foundation's composition, independence and protections "very aggressively protects the interests of [Blue Cross and its] management, at the expense of the foundation that will be principal shareholder," the legal advisers said.
Consumer advocates have said the conversion plan is inadequate.

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