The Michigan Senate has passed bills that would convert Blue Cross Blue Shield of Michigan into a non-profit mutual insurer, according to a Crain's Detroit Business report.
SB 1293 would amend the state insurance code, while SB 1294 would amend the public regulations of BCBSM, according to the report.
The proposals to reform BCBSM surfaced in September. The bills, which were originally proposed by Gov. Rick Snyder, would convert the state's largest health insurer into a non-profit mutual insurance company, meaning it would be able to retain its non-profit status. However, it would pay roughly $100 million per year in state and local taxes as well as $1.5 billion over 18 years in programs to "improve healthcare" and keep healthcare "affordable." In return, BCBSM would be treated like other insurers and HMOs in Michigan, meaning the state's oversight would be less strict.
The issue has been divisive within the state, especially among health insurers. BCBSM leaders have praised the moves thus far, saying the transition would keep their "charitable" mission while leveling the playing field across all insurers in Michigan. Andrew Hetzel, BCBSM vice president for corporate communications, said in a news release that the Senate's passage moves toward a "health insurance system where all insurers play by the same rules, and market forces ensure greater competition and choice of affordable health insurance plans."
However, the Michigan Association of Health Plans, which represents all health insurers in the state other than BCBSM, said the maneuvers will only boost BCBSM's monopoly. Rick Murdock, executive director of MAHP, said in a Detroit News op-ed that BCBSM holds 70 percent of the state's commercial insurance market, and the non-profit uses "its clout to intimidate providers into accepting far lower rates than are needed to cover their costs."
Mr. Murdock also said BCBSM is still in the middle of antitrust lawsuit with the U.S. Department of Justice and Michigan attorney general in regards to the health insurer's alleged "most-favored-nation" clauses within hospital contracts.
The bills will now go to Michigan's House Insurance Committee Nov. 8.
SB 1293 would amend the state insurance code, while SB 1294 would amend the public regulations of BCBSM, according to the report.
The proposals to reform BCBSM surfaced in September. The bills, which were originally proposed by Gov. Rick Snyder, would convert the state's largest health insurer into a non-profit mutual insurance company, meaning it would be able to retain its non-profit status. However, it would pay roughly $100 million per year in state and local taxes as well as $1.5 billion over 18 years in programs to "improve healthcare" and keep healthcare "affordable." In return, BCBSM would be treated like other insurers and HMOs in Michigan, meaning the state's oversight would be less strict.
The issue has been divisive within the state, especially among health insurers. BCBSM leaders have praised the moves thus far, saying the transition would keep their "charitable" mission while leveling the playing field across all insurers in Michigan. Andrew Hetzel, BCBSM vice president for corporate communications, said in a news release that the Senate's passage moves toward a "health insurance system where all insurers play by the same rules, and market forces ensure greater competition and choice of affordable health insurance plans."
However, the Michigan Association of Health Plans, which represents all health insurers in the state other than BCBSM, said the maneuvers will only boost BCBSM's monopoly. Rick Murdock, executive director of MAHP, said in a Detroit News op-ed that BCBSM holds 70 percent of the state's commercial insurance market, and the non-profit uses "its clout to intimidate providers into accepting far lower rates than are needed to cover their costs."
Mr. Murdock also said BCBSM is still in the middle of antitrust lawsuit with the U.S. Department of Justice and Michigan attorney general in regards to the health insurer's alleged "most-favored-nation" clauses within hospital contracts.
The bills will now go to Michigan's House Insurance Committee Nov. 8.
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