House Committee Passes Bill on Individuals' Health Coverage

By: Beth Shayne
By: Beth Shayne

People buying their own health insurance coverage soon could get some increased consumer and price protections, according to supporters of legislation overwhelmingly approved Wednesday by a state House committee.
But opponents say the bills now headed to the House floor would give Blue Cross Blue Shield of Michigan some unfair advantages over competitors and would not necessarily protect people buying health insurance.
The bills would apply to commercial insurers, HMO contracts and Blue Cross Blue Shield. Individuals seeking health insurance coverage would be required to fill out a health questionnaire from potential carriers. The insurers -- except for Blue Cross, which has a unique role in Michigan -- would be able to refuse coverage if an individual doesn't satisfy criteria for coverage.
An insurer who agrees to cover an individual would have to renew or continue the coverage for as long as the individual wants, as long as premium bills are being paid and nothing has been done to invalidate the policy. There would be limits on rate increases at renewal time based partly on geography and age, which supporters say would make coverage more affordable.
People denied coverage by other insurers would be picked up by Blue Cross in a limited but guaranteed coverage plan. Over time, other insurance carriers would have to help cover losses in the pool based on their market share.
Blue Cross says it loses money on its plans that cover just individuals. But there would be changes in state law that would make the system more sustainable for Blue Cross.
A big incentive for Blue Cross would be allowing one of its subsidiaries, the Accident Fund, to expand its product offerings beyond workers' compensation to other types of insurance such as fire and casualty. That could bring in more money for Blue Cross overall.
Blue Cross estimates that about 6 percent of Michigan's insurance market relates to coverage for individuals, as opposed to group coverage provided through employers. Blue Cross expects the market covering individuals to grow dramatically in the next few years because fewer workers and retirees are being covered by group plans in part because of Michigan's struggling economy.
"The wave is coming. It's already started," Mark Cook, vice president of government affairs for Blue Cross, told the House Insurance Committee.
Small business associations testified that some companies are dropping group coverage because they no longer can afford it, leaving more people to find their own coverage.
Blue Cross is Michigan's insurer of last resort, meaning it won't turn away customers in exchange for exemption from state taxes.
Critics of the new legislation said it would undercut oversight and regulation of Blue Cross competitive advantages beyond its state tax-exempt status. Representatives of some companies, including Aetna, said the legislation would lessen the ability to challenge Blue Cross rate increases.
Supporters of the bill disputed those claims, saying adequate regulation would be in place. Blue Cross no longer would have to get prior approval for some rate increases, but the rates still could be reviewed by regulators, much like the process for other insurance companies.
The bills were introduced last week, and some opponents said not enough time has been allowed to analyze their content.
J.P. Wieske, a representative of the Council for Affordable Health Insurance, said the process was secretive. His group includes several health insurers.
"We feel this is a serious violation of consumer protection," Wieske said.
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The insurance bills are House Bills 5282-5285.


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Comments are posted from viewers like you and do not always reflect the views of this station.
  • by Tom Location: Lansing on Oct 18, 2007 at 10:02 AM
    Blue Cross and more affordable rates? Right!
  • by jim Location: jackson on Oct 18, 2007 at 06:58 AM
    this will not help many.people are out of money.what people pay out just to get by takes every pennie they got.insurance is a luxury.many co got a better deal over seas,pay and very little ins if any for people to work.our greedy gov pushed jobs out of the states.compaines took all the high costs,as long as they could and left,and more will follow.god knows the white house don't want to give out,the proverty level hasn't been raised for years.21,000$ for a family of 4.what a joke.make over that you may get no help for your medical asstiance.what a joke.no way can this be done.trillians in taxes raised every yr.9% goes to social programs for the poor.then very little for medical programs is left which leave many uninsured.the white house won't let go of money to help the poor.they rather fight wars,spend money on foolish things.there future is all they worry about.I look for a very messy,throat cutting election next yr.hope the right on gets elected.
  • by Kelly Location: Lansing on Oct 18, 2007 at 06:14 AM
    Blue Cross getting an unfair advantage over their competitors?? Hmmmmm. Didn't the Governor's husband have a cushy job with Blue Cross?? Hmmmmm. It certainly makes you wonder why the Democrats on the committee rammed this through without taking any time for discussions and input on the subject (but then again maybe we don't have to wonder too much).
  • by Pam Location: Jackson on Oct 17, 2007 at 05:12 PM
    When the government starts regulating the standards, the prices go up. KY did the same thing years ago and companies left KY because of the health regulations.
  • by Kim Location: Mason on Oct 17, 2007 at 02:29 PM
    Affordable insurance? YEAH!!!
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