New health entity has enormous potential

With virtually no public fanfare, a multimillion-dollar foundation has been set up to distribute the assets of one of the largest and best-recognized health insurance names in the state to meet health-care needs across Missouri.

This comes at a time when state government is struggling to make ends meet because of its never-ending spending spree.

And it comes as the state is tasting the first fruits of the national tobacco settlement which, if you will recall, was intended to reimburse Missouri for the cost of providing health care to victims of smoking-related illnesses. So far, the first installment of the tobacco settlement is being used to shore up sagging state revenue, which is unable to keep pace with budgeted spending.

Against this backdrop, Attorney General Jay Nixon has quietly set up the Missouri Foundation for Health. His action came late last year as the result of a settlement with Blue Cross Blue Shield of Missouri over the fate of the insurance company's assets.

In a nutshell, Blue Cross, which had operated since the 1930s as a not-for-profit company to provide affordable health insurance at low cost, tried to compete in the insurance marketplace against for-profit companies that could pick and choose who would be insured. In a move to remain a key player, Blue Cross set up a for-profit subsidiary and moved its assets to the new company, RightChoice.

Even after this move had been blessed by some of the top legal minds in the state as well as the state's insurance commissioner, Attorney General Nixon stepped in to put a halt to the scheme. Nixon successfully argued in court that the Blue Cross move to become a for-profit corporation was illegal. After losing twice in court, Blue Cross agreed to give away its stake in RightChoice in return for keeping the Blue Cross brand, which is being licensed to other insurance programs.

Blue Cross' 80 percent share of RightChoice is currently valued at more than $660 million. Those are the assets that have been given to the new Missouri Foundation for Health. Under Nixon's carefully thought out plan, which has the potential to do enormous good, the foundation has been given almost unlimited opportunity to distribute those assets as it sees fit for any health-related program or project in the 80 counties of eastern Missouri and St. Louis which were served by Blue Cross Blue Shield of Missouri.

The foundation is so new that its board members haven't adopted any guidelines for what to do with its assets -- which, if its investments are good ones and demand for RightChoice stock continues to be strong, could grow to more than $1 billion in a year or two.

One red flag: With the legislatively imposed ban on using state funds for abortion counseling or services, Missouri Foundation for Health might be persuaded to contribute generously to Planned Parenthood and similar organizations. This will need to be watched closely.