UnitedHealthcare Dividend Plan Under Scrutiny in R.I.

The Rhode Island health insurance commissioner is reviewing a proposal by UnitedHealthcare of New England to transfer $36.8 million in profits made in Rhode Island to its parent company in Minnesota.

The public was allowed to comment on the proposal at an informal hearing held by the Department of Business Regulation on Tuesday. UnitedHealthcare covers 18.5 percent of insured people in Rhode Island, according to state health officials.

State law requires insurers to obtain special permission to take so-called “extraordinary dividends” out of state. The dividends are profits that exceed either 10 percent of the insurer’s surplus or the net income from the previous year’s operations.

UnitedHealthcare spokeswoman Debora M. Spano said UnitedHealthcare has financial obligations to parent company UnitedHealth Group. She also said the insurer would spend 10 percent of the funds on health care technology programs in Rhode Island if the proposal is approved.

Spano said the money has accumulated over several years.

“We haven’t really made that much money,” Spano said. “We make about 4 percent profit on business in Rhode Island.”

Critics oppose the move, saying Rhode Island patients who spend thousands of dollars a year for coverage expect the money to be spent in state, perhaps to lower health care premiums.

“It’s obscene,” said Steven R. DeToy, spokesman for the Rhode Island Medical Society.

He also said United hasn’t contributed to efforts like Blue Cross and Blue Shield of Rhode Island’s project to measure and control spending on radiology services.

“They’re bad corporate citizens,” DeToy said.

Hearings on extraordinary dividends have been handled confidentially in the past. A decision is expected by March 30.

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Information from: The Providence Journal, http://www.projo.com/