Traverse City Record-Eagle

Michigan

October 12, 2012

Blue Cross vote eyed for next week

After meetings, plan could go as far as a final vote next week

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DETROIT (AP) — The Michigan Senate may discuss the proposed overhaul of Blue Cross Blue Shield of Michigan next week, Senate Majority Leader Randy Richardville said Thursday.

The Monroe Republican told The Associated Press that numerous private meetings and public hearings have been held regarding a plan to end the nonprofit health insurer's tax-exempt status. He said it could get a vote during Wednesday's session, the last one until after the November presidential election.

"It could very well go all the way" to a final vote, Richardville said, though he first wants to make sure Republicans are comfortable with it during caucus meetings. Richardville said Senate leaders have been in talks with Blue Cross and the Michigan Association of Health Plans, which represents 15 of the Blues' competitors.

Republican Gov. Rick Snyder proposed the plan last month and Blue Cross has endorsed it. The plan calls for Blue Cross to pay about $100 million in state and local taxes annually. Blue Cross currently is tax exempt in exchange for being the state's so-called insurer of last resort — meaning it has to provide coverage regardless of a customer's health status.

Under the plan, it would become an organization owned by its policyholders and regulated in the same way as many of its competitors.

Blue Cross also would contribute about $1.5 billion over 18 years to a nonprofit entity that would take on some of Blue Cross' "social mission" work by improving public health and access to health care, particularly for children and the elderly.

Michigan Attorney General Bill Schuette and Blue Cross' competitors oppose the measure. Schuette is seeking a more detailed financial review and has expressed concerns about long-term effects on coverage for senior citizens.

Schuette negotiated last year with Blue Cross a five-year rate freeze on the state's Medigap program, which fills the gap in Medicare coverage for seniors. He has said he isn't clear on what happens after the freeze expires.

Snyder and Blue Cross officials have said the proposals aim to "level the playing field" for insurers and modernize Blue Cross, which is governed by a separate state law. The company, which serves about 4.4 million residents, wouldn't be sold or lose its nonprofit status.

Eleven other Blue Cross Blue Shield companies nationwide are similarly structured as mutual insurers and operate in 18 states.

Michigan Association of Health Plans Executive Director Rick Murdock said last month during testimony that Blue Cross controls 70 percent of the state's commercial insurance market and the measure as proposed maintains its monopoly status.

GOP Sen. Joe Hune, the bill's sponsor and chairman of the Senate Insurance Committee, has "worked diligently with everyone involved ... to come to some sort of agreement," said Troy Tuggle, Hune's chief of staff.

Blue Cross spokesman Andy Hetzel said the insurer is "encouraged by the progress this important legislation has made."

The committee is scheduled to hold one final hearing Tuesday on the Blue Cross measure. The House so far has held one hearing.

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