Blue Cross PAC pumped candidates' coffers

DETROIT, Nov. 10 (UPI) -- A political action committee funded by workers at Blue Cross Blue Shield of Michigan spent $445,000 on campaign contributions in October.

The money, which came as the non-profit insurer was laying off 100 workers in Detroit, went to support the election campaigns of lawmakers who will consider legislation to revamp the state's insurance market for individuals, The Detroit News reported Monday. Blue Cross, Michigan's largest insurer, also would be given more flexibility in setting rates, the newspaper said.

Blue Cross blamed the layoffs on a weak economy and losses in the individual insurance market, which it expects to reach $264 million in 2009.

Blue Cross sees the market for coverage of individuals as a growth segment of its business as layoffs in Michigan escalate.

"The problem with the system is that it has caused Blue Cross's insurance pool to become so expensive financially it is becoming unsustainable," Mark Bartlett, Blue Cross's chief financial officer, said.

Along with the PAC contributions, critics say the insurer was spending money unwisely, noting its $1.4 million television advertising campaign in support of the measures earlier this year, the News reported. Blue Cross, they say, should re-examine its spending priorities.

"It's difficult to explain to our members that Blue Cross is struggling financially when they're able to contribute campaign contributions to the level they have, in addition to having billions of dollars in reserves," said Felicia Wasson, a government affairs director for AARP Michigan.