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Jeff Valentine
Phone: 1-800-914-NEWS (6397)
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Why is CareFirst taking these steps now to emphasize its not-for-profit mission?
These actions reflect and are consistent with the new mission adopted by the CareFirst Board in November 2003. That mission was adopted, in part, in response to reform legislation passed by the Maryland General Assembly which called on the company to demonstrate its not-for-profit mission. During the past year, CareFirst's Mission Oversight, Finance and Strategic Planning Committees developed this plan to serve its members and address pressing community health needs throughout CareFirst's service area.
How will lowering the operating earnings target affect premiums paid by CareFirst customers?
Many of our customers have already seen the positive impact of this move reflected in their premiums for 2005. Because our earnings targets are lower, we will be able to stabilize premiums for existing customers and help to make coverage more affordable for others. Many factors influence pricing, including care cost trends and actual claims experience. Through this action, we will be better able to mitigate pricing increases, either holding the line on rates or keeping them lower than they otherwise would be.
How does CareFirst's level of investment in mission-related activities compare to that of other not-for-profit Blue plans?
Our primary mission as a not-for-profit health insurer is to provide quality, affordable health coverage to our members and potential members, which is reflected by the decision to reduce our 2005 operating income target by at least $60 million. In addition, CareFirst will direct $24 million in certain tax exemption savings to subsidize prescription drug coverage for 35,000 low-income seniors in Maryland and provide coverage for difficult-to-insure individuals in the District. The $8.7 million invested in mission-related activities in 2005 represents more than 7.4 percent of CareFirst's projected earnings - a three-fold increase from last year. Cumulatively, we believe the overall commitment compares favorably with those of other not-for-profit Blues Plans nationally.
Is this a long-term commitment?
Absolutely. We will continue to take appropriate steps to keep care affordable for our members and make care accessible for others throughout the region. We expect the amount we invest in mission-related activities - budgeted at $8.7 million in 2005 - to increase steadily in subsequent years.
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