Blue Shield Might Win L.A. City Worker Contract Over Anthem
Blue Shield of California could acquire a contract to provide health coverage for Los Angeles city workers over a bid by Anthem Blue Cross, the Los Angeles Times reports.
Details of Bids
Anthem -- which currently provides HMO and PPO plans for city workers -- offered a $121 million bid to provide coverage for three years, which would include a 10% increase in premium costs next year from the current contract.
Meanwhile, Blue Shield proposed a $112 million contract in which the city would pay 2% more in premium costs next year than the current contract.
Details of City Officials' Actions
Despite that the city would pay less for workers' health coverage under Blue Shield's bid, city staff members and outside advisers twice recommended Anthem's offer.
However, a benefits committee made up of city officials and labor leaders last week overruled that recommendation and voted in favor of Blue Shield's bid.
Blue Shield's proposal still is subject to approval by L.A. Mayor Antonio Villaraigosa.
If the mayor approves Blue Shield's bid, an estimated 7% of Anthem members would lose access to their current physician because of the switch.
Conflict of Interest Concerns
Jerry Flanagan -- a Consumer Watchdog attorney -- said the Los Angeles City Ethics Commission is investigating possible conflicts of interest between the Service Employees International Union Local 721 and Blue Shield.
The union's state office employs Mark Weideman, a Blue Shield executive, as a lobbyist.
Meanwhile, an SEIU leader sits on the city's benefits panel and voted for the Blue Shield bid.
Flanagan said that the mayor's office should thoroughly review such issues before awarding the contract to Blue Shield.Blue Shield and SEIU have denied any conflict of interest (Terhune, Los Angeles Times, 6/18). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.