Governor Rick Snyder has proposed overhauling Blue Cross and Blue Shield of Michigan, including ending the nonprofit health insurer's tax exempt status and aligning it with competitors across the state. The plan requires approval by the Legislature and Blue Cross' board of directors.
The last time lawmakers revamped the blue cross blue shield law was in 1980. The governor says it is time to revisit that law to introduce more competition into the health care insurance game. The motivation for this proposed changed came from other health care providers who felt the Blues had an unfair advantage.
"Many of the health care providers, other than the blues, were saying its not a level playing field, they're not paying their taxes," said Jim Haveman, state health director.
So under this plan, the Blues would pay taxes, would be asked to kick $1.5 billion in a heath care research fund and the company would become a non-profit mutual. In theory, that could mean lower insurance costs for the consumer.
"That would be part of the hope, Tim of this process. You'd hope there'd be more options. It's a competitive market," said Governor Rick Snyder.
Yet the state insurance commissioner can't guarantee that will happen.
"We're not absolutely positive but we have set up a system to be more competitive," said State Insurance Commissioner Kevin Clinton.
But lawmakers have to sign off on this and given the governors track record on convincing House republicans to go along with his health care market place, could these Blues reform be a problem too? The governor starts out with a potential setback. He briefed a Senate republican on all the details, but the House republican chairman says he did not have as much information as his Senate counterpart.
"I've got nowhere near the amount of information that he has. What I do have are a lot of questions," said House insurance chair Republican Peter Lund.
The governor says if the president's healthcare plan is tossed out next year, that might impact what he is trying to do on this Blues reform.
Blue Cross Blue Shield later released a statement saying, "This plan is not exactly what Blue Cross would have proposed, but it does create a fair and balanced set of rules for health insurance."
