Panel cuts poison pill from Mich. Blue package

Ten Republicans and one Democrat voted for the bills. Three Democrats abstained.

When the GOP-led House will vote on the Blue Cross changes has not been determined, but a spokesman for House Speaker Jase Bolger said discussions on adding abortion provisions could continue.

“If we find that language and can get everybody’s support, we would add that,” Ari Adler said. “The goal here is to get the Blue Cross reforms in a way that the governor will sign the bills.”

The proposed reworking of Blue Cross, which has 70 percent of Michigan’s health insurance market, would end its tax-exempt status and let the insurer convert to a customer-owned nonprofit. Supporters say the insurer must be modernized as it prepares for PPACA and to participate in a mandated online exchange where the uninsured and business owners can shop for insurance starting Oct. 1.

Under the legislation:

• Blue Cross rate increase requests would be reviewed by the state insurance commissioner, as other insurers currently are, and no longer be subject to an extra layer of scrutiny by the Michigan attorney general.
• Blue Cross would shed its charitable “social mission” and contribute nearly $1.6 billion over 18 years to an endowment working to improve public health and health care access.
• From mid-2016 through 2021, the fund would disburse $120 million — or nearly $25 million a year — to subsidize Medigap plans, which fill the gap in Medicare coverage for seniors. Blue Cross now spends about $200 million a year, or 1 percent of revenue, to lower the cost of its Medigap policies.

Senior advocates who oppose the legislation warned legislators Thursday of sticker shop coming once a rate freeze on Medigap plans for 200,000 seniors ends in 2016. Blue Cross countered that rates go up anytime a freeze is lifted and newer insurance products such as Medicare Advantage plans will continue to be affordable options for seniors.

Bob Fox with the Michigan Senior Advocates Council said the attorney general office’s has restrained Blue Cross rate hikes that would have been much higher. Republican Attorney General Bill Schuette opposes the bills.

“We’re talking about taking the attorney general out of the process? Please rethink that,” Fox said. “He’s a seniors’ attorney. We can’t afford high-priced attorneys like Blue Cross can. AGs from both parties have done a wonderful job protecting us.”

Mark Cook, vice president of governmental affairs for Blue Cross, said Medigap is not people’s primary insurance and seniors’ health bills are mostly covered by Medicare.

“We’ve been forced to sell below cost. There will be more competition in the Medigap marketplace with adoption of these bills,” he said.