Change of control

Blue Cross directors Wednesday showed a sensitivity both to public concern and political reality by agreeing to release the details of the compensation packages for top executives from the sale of the Maine insurer to Anthem Insurance. The decision was important as a demonstration of good faith and accountability.

The compensation packages, called change-of-control agreements, are scheduled to be released today. The agreements describe how top executives whose jobs are eliminated because of the sale are to be compensated. If the compensation is high enough, these agreements are sometimes called golden parachutes. Given that Blue Cross salaries are substantial compared with average incomes in Maine, the numbers in these agreements could well look high. As the public interprets these figures, it will be important to keep in mind the salaries the Maine nonprofit already was paying the executives.

The demand to release the change-of-control agreements came largely from the Maine Medical Association and the Maine Education Association, which is the largest customer of Blue Cross. Their overall opposition to this sale and their concerns about coverage in the years to come are understandable. Anthem is a very large company that could prosper whether or not Maine doctors and their patients were pleased with the service they received from the insurer. That wasn’t true of the much smaller Maine Blue Cross. That makes this deal a change of control of another sort. And that makes people nervous.

There is only so much Blue Cross can do to reassure Maine that the sale is the best offer available and a good one for the state. Being up front with the compensation package is one way. Another is providing information about the competing offer from Massachusetts Blue Cross, which the Maine Blue also has done. The two Blue Cross insurers have differing versions about what had been offered and whether it was still on the table when the directors of the Maine Blue accepted the Anthem proposal. The Maine Blue has provided evidence that the Massachusetts company removed the offer it continues to say is live. The Bay State insurer needs to help clear this up.

Maine’s superintendent of insurance, Alessandro Iuppa, has only until the end of the month to approve or reject the Anthem proposal. That’s not much time, given the number of doubters. Blue Cross could continue to help itself significantly if during the next couple of weeks it continues to take actions like the one scheduled for today.