Hatch criticizes insurers opposed to premium tax Star Tribune: Newspaper of the Twin Cities April 21, 1987 by Joe Blade, Staff Writer George Halvorson

Hatch criticizes insurers opposed to premium tax

Star Tribune: Newspaper of the Twin Cities
April 21, 1987
Author: Joe Blade; Staff Writer

State Commerce Commissioner Michael Hatch attacked nonprofit health insurers that oppose a proposed 2 percent tax on their premiums, accusing two of them Monday of wasting money that could help pay the tax.

Hatch also said a letter-writing campaign by insurers deceived their subscribers by saying the tax will be passed along to consumers. Hatch said competition in the industry will make the companies absorb the additional cost.

In defending Gov. Rudy Perpich's proposal to raise $75 million by extending the tax now paid by for-profit insurance companies to nonprofit insurers, Hatch concentrated on what he considers questionable uses of funds by Physicians Health Plan (PHP) and Blue Cross and Blue Shield of Minnesota.

Hatch challenged:

# A $15,000-a-month payment by a subsidiary of PHP to its profit-making management company, United Healthcare Corp. Hatch said he has ordered return of the payments, which total about $350,000, because no services apparently were given.

# Blue Cross/Blue Shield's payment for a trip to Switzerland by relatives of some top executives. Hatch said he ordered the practice halted.

Nancy Hurd, a spokesman for PHP, said the company wouldn't comment on nonconcrete accusations. No response could be obtained from Blue Cross/Blue Shield.

Hatch also criticized Group Health Inc. for a March 31 letter to its senior-citizen members. It said the tax would cost them the equivalent of more than five months' additional premiums. Hatch said a 2 percent tax couldn't create that increase. George Halvorson, president of Group Health, said the total increase would indeed come to that much if the tax applied to Medicare payments to the company. But since the letter was written, an amendment has been offered to exclude those payments from the computation, so the statement would no longer be correct, he said.

Section: NEWS
Page: 01B