HELENA (AP) — The new Montana Healthcare Foundation will have a hefty $40 million bankroll to start, and up to $200 million after Blue Cross Blue Shield of Montana's assets are sold in a pending acquisition, but it's not yet clear what the nonprofit will do with that money.
Attorney General Tim Fox announced the creation of the new foundation Friday, the same week he and Insurance Commissioner Monica Lindeen approved the sale of Blue Cross Blue Shield of Montana to Health Care Service Corp. of Chicago. The two companies are reviewing the conditions included in the state regulators' approval orders.
Under state law, proceeds from the sale of a nonprofit health entity such as Blue Cross must go to a nonprofit foundation with a similar mission. The Montana Healthcare Foundation's mission will be to provide financial support to improve the quality, availability and awareness of health care programs and services for Montanans, according to legal documents establishing the foundation.
But how it does so won't be clear until a board of trustees is selected, Fox said.
"This is an independent board. When it convenes, it will be free of any state official's influence and they will be charged with the responsibility under their fiduciary duties to come up with the ways in which they might help the health care and health of Montanans," he said.
If the Blue Cross acquisition goes through, the $40.2 million purchase price must go to the foundation within 60 days of June 25, Fox said. That money will be held in trust, initially to be invested in short-term government treasury securities so that the new trustees can make their own decision on how to invest the money long term.
That $40 million will be supplemented by money from the liquidation of the rest of Blue Cross' assets, which could amount to $150 million after liabilities are paid and depending on the market value, officials said.
The declaration of trust establishing the new foundation says the money is to be used for programs and services that improve the availability of and access to health care and services for the uninsured and underserved populations of the state, improve the health of all Montanans and for initiatives to address short-term health care needs and concerns.
The money can't be used as government funds, its spending can't be directed by a government official and it can't be used to refund insurance premiums to Blue Cross policyholders, Fox said.
He appointed former University of Montana law school dean E. Edwin Eck as the interim trustee of the foundation. Eck previously headed a committee that proposed a uniform trust code to the state Legislature and is the director of the Montana Mental HealthTrust.
Eck will make the initial short-term investment of the $40 million and lead a three-person search committee to find five trustees to serve on the board.
The committee may meet as early as next week, he said.
The paperwork to apply for 501c(3) nonprofit charity status with the IRS is being prepared, Eck said.
None of the three on the search committee will be able to serve as trustees, no will any public employee or elected official.
Once the five trustees are appointed, Eck and Fox will step aside and the foundation will be an independent entity, Fox said.