R.I. Blues Can Start For-Profit Wellness Unit, State Decides

November 13, 2006

The state’s top insurance regulator has approved a plan by Blue Cross & Blue Shield of Rhode Island to create a for-profit subsidiary that will sell wellness programs to other Blue Cross entities and companies outside the state.

The Health & Wellness Institute will be Blue Cross’ first wholly owned for-profit subsidiary. It will sell products and services such as nutrition and exercise classes.

Blue Cross was founded by the General Assembly in 1939 as a not-for-profit company to serve the public interest.

“This is a wonderful opportunity for (Blue Cross) to lead the country in research and innovative health and wellness initiatives,” said Michael Samuelson, the institute’s president. “We look forward to collaborating with researchers in local academic institutions to find better ways to improve the health of our citizens through prevention and behavioral-change offerings.”

State Health Insurance Commissioner Christopher Koller set 15 conditions when he approved the institute Thursday to ensure that any profits from out-of-state businesses benefit state residents and that higher premiums won’t be used to pay for the initiative.

Other conditions address keeping Blue Cross solvent and keeping personal health information confidential.

“Working with employers to improve employee wellness is a laudable goal,” Koller said. “Our conditions ensure that the formation of the institute is done right.”

Attorney General Patrick Lynch had called the proposed institute a “potentially risky venture” that could siphon money from Blue Cross reserves and had petitioned Koller’s office to reject the proposal.

Lynch spokesman Michael Healey said Koller’s conditional approval incorporates Lynch’s concerns.

“The laws that created Blue Cross and defined its role were very carefully written, and the attorney general’s issue was basically that Blue Cross proceed with caution before forming a for-profit wellness institute with the hard-earned premium dollars of subscribers,” Healey said.

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