Health insurance bills need Senate scrutiny Will Blue Cross gain at public's expense?
28 12 07 - 15:30
The Michigan Senate should throw up a stop sign on health insurance legislation that would significantly change and raise rates for people who pay for their own coverage. The House allowed the legislation to zoom through like a toboggan shoved down a Teflon hill.
Blue Cross/Blue Shield of Michigan - the state's largest health insurer - crafted the bills that rewrite rate-setting, oversight and coverage rules for individual health insurance plans. They conveniently also expand profit-making options for Blue Cross subsidiaries.
Those are significant changes and need to be thoroughly vetted to determine what's best for the public. Two weeks after being introduced, the package of four bills (5282-5285) breezed through the House in October with scant opposition or opportunity for public scrutiny. The first two bills passed by votes of 89-17 and 90-16, respectively; the second two by 84-22 votes.
Given the impact the legislation could have on consumers and competition in Michigan's insurance market, state senators should see that these bills get the attention they deserve.
Blue Cross provides or manages coverage for 4.7 million people. That's about 70 percent of the health policies in the state. It's also the insurer of last resort - required by state law to cover anyone who can pay the premiums. That's a provision relied upon by those who can't get coverage from other insurers. Blue Cross enjoys nonprofit, tax-exempt status in Michigan for taking on that responsibility. Those tax breaks amounted to $82 million last year.
The proposed legislation would let Blue Cross act more like its for-profit competitors, but retain its tax-exempt status. Michigan Attorney General Mike Cox and other opponents says Blue Cross should not be allowed to have it both ways. They are right.
Among other things, the bills would:
Eliminate the state insurance commissioner's ability to set Blue Cross rates and end customers' and the attorney general's role in challenging rate hikes.
Allow Blue Cross to drop its one-size-fits all rating policy and charge different rates in different parts of the state, taking age and illness into consideration.
Allow Blue Cross to wait 12 months, instead of the current six, to provide coverage for people with pre-existing conditions.