House Panel Mulls Blue Cross Blue Shield Overhaul

By: Lindsay Veremis Email
By: Lindsay Veremis Email

Will an overhaul for Michigan's largest insurer save cardholders money, or give a giant an unfair advantage? Lawmakers heard both arguments Tuesday, as they sat through hours of testimony on a proposal that would transform Blue Cross Blue Shield from a non-profit charity, to a non-profit mutual.

The company has been the insurer of last resort for 30 years in Michigan, earning tax breaks in exchange for covering anyone regardless of pre-existing conditions. Under the federal government's new Affordable Care Act, that's no longer necessary, because no insurer can deny coverage.

Governor Rick Snyder is hoping to level the playing field, as the ACA takes effect, by restructuring the Blues.

Supporters of the plan call it smart, common sense changes for a changed marketplace. They want to see BCBS pay taxes and be regulated like any other insurer, no special perks, no unique burdens.

"It gives our competition what they've been asking for," Andrew Hetzel, with the company said of the governor's plan. "It's not easy to pay $100 million a year in taxes, but we think the proposal overall establishes a marketplace that works." One, the Blues says will be driven by competition, not regulation.

The company believes the plan will give customers more choices, drive prices down and allow Blue Cross Blue Shield to keep jobs in Michigan.

Opponents call it reckless.

"Michigan could potentially provide a national blueprint for charitable insurers to extricate themselves from attorney general oversights and potentially walk off with billions of dollars in taxpayer charitable assets," Don Haezert with advocacy group, Michigan Consumers for Health, said.

Haezert says the company's last resort status has given it a monopoly, more than 70 percent of the Michigan market. He's worried a deregulated Blues will use that market share to unfairly hike prices in the future.

Rates woud be frozen for four years under the governor's plan and subsidized for five years after that.

"We feel seniors will be protected first by the rate freeze, but second through more choices in the marketplace," Hetzel said.

Blue Cross Blue Shield would also make a $1.5 billion payment into a state-wide health fund over the next 18 years. The money would be used to promote health and wellness and for the subsidies, that will offset increases in Medigap costs.

The state Senate has already okayed the plan, the House could vote by year's end.

The Blue Cross Blue Shield board of directors will also need to sign off on the measure. Hearings will continue next week. is happy to provide a forum for commenting and discussion. Please respect and abide by the house rules:

Keep it clean, keep it civil, keep it truthful, stay on topic, be responsible, share your knowledge, and please suggest removal of comments that violate these standards. Comments may take up to 24 hours or longer to appear on the site.

See full commenting rules...
powered by Disqus
WILX 500 American Road Lansing, MI 48911 517-393-0110
Copyright © 2002-2016 - Designed by Gray Digital Media - Powered by Clickability 179196481 -
Gray Television, Inc.