Governor Unveils Blue Cross Blue Shield Proposal

Michigan Governor Rick Snyder announced his dramatic proposal to alter the state’s health insurance market during a press conference Tuesday. After years of urging by the Blues to revamp the regulation set forth in Public Act 350 of 1980, the Snyder Administration proposed a restructuring of the Blues to a non-profit mutual insurer.

The proposed reform would cause the Blues to be treated largely like any other insurer in the market. The company would lose its tax exempt status, repeal PA 350, and no longer have involvement from the Attorney General in rate increase requests. The change could mean up to $100 million dollars in new tax revenue to the state.

Further, the proposal calls for the Blues to pay $1.5 billion over 18 years into an independent foundation working toward the overall improvement of the state’s health.

Motivation for changing the Blues structure now is the U.S. Supreme Court’s decision to uphold the vast majority of the Patient Protection and Affordable Care Act, which will ultimately end Blue Cross’ position as the state’s insurer of last resort. Beginning in 2014, all insurers must accept all applicants regardless of pre-existing conditions. Additionally, the federal health plan calls for changes that the Blues have trouble complying with under the current regulatory structure.

The legislation will originate in the Senate, with Senate Insurance Committee Chair Joe Hune (R-Hamburg) taking the lead. The Governor has requested the Legislature act prior to leaving in December.

posted by PAA Online , Friday, September 14, 2012 11:18 AM
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