The first two days of hearings on Governor Rick Snyder’s proposed overhaul of Blue Cross-Blue Shield of Michigan have brought critics, including the state Attorney General and for-profit companies that compete with the insurer.
For-profit companies say any insurance reforms should make it easier for them to compete with Blue Cross. The companies have long complained about their inability to win a bigger piece of Michigan’s insurance marketplace. They want to limit the Blues’ ability to negotiate big discounts in the fees it pays to health care providers.
Blue Cross covers four million Michiganders.
“There’s no disputing the fact that Blue Cross-Blue Shield has 70 percent of Michigan’s commercial insurance market – a monopoly by any definition,” says Rick Murdock, with the Michigan Association of Health Plans. It’s an organization of 15 for-profit and not-for-profit insurers.
“We hope that the proposed reform of Blue Cross-Blue Shield will take place under the shared objective of Michigan striving to become the most-competitive marketplace in the nation, which means by definition no company being allowed to occupy a monopoly position,” Murdock says.
A spokesman with Blue Cross says Governor Rick Snyder’s plan would create a more competitive insurance market in Michigan, but he says Blue Cross would not relinquish its mission of ensuring affordable health coverage to as many people as possible.
“Blue Cross would pay taxes the same as other carriers, and that non-profit distinction would allow us to retain our focus on providing access to affordable care by keeping the cost and the margins low and not by maximizing profit,” says Mark Cook.
Blue Cross is currently a charity that does not pay state or local taxes. Governor Rick Snyder has asked the Legislature to send him legislation that would convert Blue Cross to a subscriber-owned not-for-profit corporation by the end of the year.
Yesterday, Michigan Attorney General Bill Schuette weighed in on the plan. He says he still has a lot of questions.
“I think we need to have a thorough, independent, and complete review of the assets of Blue Cross-Blue Shield and its affiliated companies,” he says. “Why? Because right now, Blue Cross is designated as a charitable asset of the people of the state of Michigan.”
By law, Blue Cross cannot turn away customers regardless of their health. In 2014, the federal healthcare law will require all insurance companies to take all applicants. That will make the Blues’ mission as Michigan’s insurer of last resort unnecessary.
The company supports the legislation.