Blue Cross Sues Over Running Nebraska Health Plan

April 6, 2012

Blue Cross and Blue Shield of Nebraska has filed a lawsuit to block the state’s planned switch to a new health insurance company, alleging improper lobbying on United Healthcare’s behalf.

The Lincoln Journal Star reported that Blue Cross says the chairman of the Nebraska Republican Party violated state rules by lobbying on behalf of United Healthcare.

Nebraska officials have said switching health insurance companies will save taxpayers and state employees a combined $8 million annually, so the state plans to change to United Healthcare on July 1.

Blue Cross officials have argued the change actually will cost an additional $10 million per year because of limits in the United Healthcare network.

Blue Cross attorney Kermit Brashear said attorney Mark Fahleson, who is the state GOP chairman, lobbied on behalf of United Healthcare while bids on the contract were pending. Brashear said that violates state regulations because of Fahleson’s political position.

Fahleson did not immediately respond to a phone message left late on April 4.

A spokeswoman for the state Attorney General’s office declined to comment on the lawsuit.

Blue Cross and Blue Shield has administered Nebraska’s health insurance plan for nearly 30 years.

Nebraska self-insures, but hires an insurance company to administer its plans. The state of Nebraska and its employees spend about $184 million annually on coverage. The state pays 79 percent of premiums, and employees cover 21 percent.

The state plans cover approximately 30,000 state employees and dependents.

The health plan change does not apply to Nebraska State Troopers, or employees within the University of Nebraska or the Nebraska State College system, because those groups all have their own plans.

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