Think tank seeks financial support for CareFirst fight
By: Michael Neibauer
Examiner Staff Writer
October 4, 2009
The D.C. think tank that has led the lobbying effort to divide an area health insurer's massive financial surplus for community use is now imploring its supporters for money to continue the fight.
Walter Smith, executive director of the nonprofit D.C. Appleseed, asked Appleseed supporters for their financial help "at this critical time in the long fight to make CareFirst meet its obligations as a 'charitable and benevolent' not-for-profit company."
"Going toe-to-toe with CareFirst over whether the company has built up excessive surplus funds has forced us to incur $100,000 in unanticipated expenses during particularly difficult economic times," Smith wrote in an e-mail Thursday to every Appleseed subscriber.
Appleseed remains financially stable, Smith told The Examiner, but its reserves are down as a result of the eight-year CareFirst battle.
"D.C. Appleseed is a small organization and we do everything usually through pro bono support," Smith said. "I'm not used to having to pay for expert advice."
The D.C. Council, with much help from Appleseed, adopted legislation last year directing the D.C. insurance commissioner to decide whether CareFirst's $687 million surplus is "excessive" given its nonprofit status and its congressional mandate to act as a benevolent and charitable institution.
Acting Commissioner Gennet Purcell was expected to issue her decision Sept. 30, but sought and received a three-month extension.
If Purcell rules that the surplus is excessive, the law directs CareFirst to devise its own plan for dividing the fortune for community benefit. The statute allows the insurer to spend every penny of the surplus on existing subscribers, say to reduce premiums.
The law does not explicitly provide any money for the District or for Appleseed.
But D.C. activist Peter Rosenstein, a CareFirst subscriber, thinks differently. Rosenstein fired off an e-mail to Smith Thursday in which he condemns Appleseed's effort "to rip-off the CareFirst reserves for the City and for Appleseed."
Appleseed has no stake in the surplus, Smith responded. Rosenstein, he said, "just doesn't know the facts."
