Governor Rick Snyder has proposed an overhaul of the rules covering Blue Cross-Blue Shield of Michigan. The governor’s plan calls for Blue Cross to become a customer-owned not-for-profit insurance company.
Blue Cross would have to pay taxes adding up to $100 million dollars a year or more, but the company could also make changes to its rates a lot more quickly and easily. That would help it compete for business.
Right now, Blue Cross is the only insurance company in Michigan that has to accept all applicants, regardless of their age or health history. That would change under the new federal health care law, which requires every insurer to accept all applicants.
Governor Snyder says that’s why it makes sense to change the rules.
“Blue Cross will be a marketplace competitor,” he says. “It will be working under the normal insurance regulatory rules, and, if you look at it, it will be a player that can compete against everyone else in terms of offering, hopefully, lower cost, better choices of healthcare for all our citizens.”
Snyder still needs the approval of the Legislature and the Blue Cross board.
“This is not a done deal,” he says. “The point here was to put out a proposal that I think was very sound, very logical.”
The proposal also assumes the federal healthcare law remains intact after the November elections.
Andy Hetzel, vice president at Blue Cross, says the new federal health care law is changing the insurance marketplace and Michigan needs to keep up.
“You have rules for certain insurance companies that other insurance companies don’t follow,” he says. “You have taxes that are paid by some insurance companies and not paid for by others. You have this hodgepodge of regulation that, over time, has given Michigan one of the worst regulatory systems in the country.”
For-profit insurance companies say the overhaul does not make sense for them if it allows Blue Cross to continue to dominate Michigan’s health insurance market.