Blue Shield conflict of interest for Perez?

February 4, 2011 12:00:00 AM PST
Health insurance giant Blue Shield delayed plans earlier this week to raise rates by as much 59 percent, but now there's new outrage from critics on word that Blue Shield hosted a $100,000 fundraiser for Assembly Speaker John Perez, D-Los Angeles.

After weeks of public outcry over rate hikes of as much as 59 percent on individual health insurance plans, Blue Shield finally agreed to delay the move this week. Now critics are calling on Sacramento to bring in company executives and demand an explanation.

"This is probably the largest rate hike in California history for health insurance. So I think there's no question that the Legislature should be holding hearings. I think they should be subpoenaing the CEO of Blue Shield," says Jaime Court from Consumer Watchdog.

Saying he's just as outraged as the public, Perez insists he plans to hold hearings.

"We absolutely are. I think you see our health committee already starting down that process," says Perez.

But the Health Committee chairman's office says there are no firm plans, let alone a hearing date. Leaving some question how committed Perez is to holding Blue Shield's feet to the fire, particularly after the insurance industry threw a $100,000 fundraiser for the speaker last week at a Sacramento restaurant. His car and driver were seen waiting outside.

"He either needs to give back the money or he needs to hold hearings very quickly because the specter of impropriety is great," says Court.

When ABC30 asked Perez about the fundraiser, he said it's not a factor.

"Yes, we can be fair. It's not only the Assembly's role in doing this oversight, but the Senate's role," answered Perez.

"We are going to be very aggressive and the speaker is going to very aggressive in protecting the consumers first," says State Sen. Darrell Steinberg.

You may recall how the Assembly last year quickly and famously used a subpoena threat to call in the CEO of the company that owns Anthem Blue Cross to justify under oath a 39 percent rate hike -- the company later withdrew it.

When asked "Have you no shame?" in the hearing on February 24, 2010, Leslie Margolin from Anthem Blue Cross responded, "The question is one that is disappointing to me, Mr. Chairman."

Calls to Blue Shield and its head lobbyist who put together the fundraiser were never returned. Blue Shield has only delayed its rate hike by 60 days, so the clock is ticking for the legislature to take any action.

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