Blue Cross Blue Shield of Michigan Says Guaranteed Access Provisions of
Insurance Reform Bills Protect Michigan Consumers Twice-Over
Creating 'high risk pool' while preserving Blue Cross's nonprofit mission
gives Michigan consumers most secure insurance market in the nation
LANSING, Mich., Jan. 30 /PRNewswire-USNewswire/ -- Creation of a
Guaranteed Access Plan to provide insurance coverage to people rejected by
commercial insurers and HMOs because of pre-existing medical conditions was
the focus of testimony before the Michigan Senate Health Policy Committee
today. The Senate is considering a package of House-passed legislation to
reform Michigan's individual health insurance market to protect consumers.
Primarily financed by Blue Cross Blue Shield of Michigan, the Guaranteed
Access Plan (a so-called "high risk pool") would complement Blue Cross's
ongoing responsibilities to accept everyone who applies for coverage to give
Michigan consumers the most security possible as tens of thousands more
individuals seek health insurance outside of employer groups every year.
"This legislation provides Michigan consumers with a double layer of
security," said Andrew Hetzel, BCBSM vice president, corporate communications.
"The bills preserve Blue Cross's historic nonprofit role, accepting everyone
who applies for coverage, and providing millions of dollars beyond our tax
benefits to keep health care affordable and promote access. At the same time,
they create a means of obtaining coverage for people who are rejected by
commercial insurance companies and stabilize the entire marketplace by
spreading the responsibility for excess medical cost across all insurers.
"This is really the best of both worlds for Michigan consumers," Hetzel
said.
A review of insurance nationally shows that 34 other states have adopted
high risk pools to help cover individuals with serious medical conditions. In
29 states, high risk pools are subsidized by a financial assessment on all
insurance carriers operating in the individual health insurance market. Many
of these same carriers oppose Michigan creating a similar system of shared
responsibility.
"Creating the Guaranteed Access Plan, preserving Blue Cross's mission,
putting reforms in place to protect consumers from rate hikes and providing
refunds for people if the insurance commissioner finds they have been
overcharged, combine to give Michigan consumers one of the most secure
insurance systems in the nation," Hetzel said.
The legislation preserves Blue Cross's current nonprofit mission to cover
everyone who applies and contribute to affordable health care in the state --
but enhances that role by making BCBSM responsible for administering the GAP
and paying the lion's share of the cost:
-- BCBSM would pay all of the costs associated with the GAP for the first
two years.
-- After two years, BCBSM would continue to pay all the administrative
costs of the GAP in perpetuity. These costs typically total about 10
percent of the cost of claims.
-- After two years, BCBSM would pay out all of the premiums collected by
the GAP to cover GAP member claims, plus an additional 5 percent above
premiums collected. For GAP losses above 105 percent of premiums
collected, the state insurance commissioner would determine whether an
assessment of the insurance carriers in the individual market was
needed.
-- After two years, BCBSM would pay its share of any industry-wide
carrier assessment. The assessment would be applied to each insurer
based on their market share.
Blues Mission Preserved - Returning Multiples of Tax-Free Benefit to
Michigan
In addition to creating the new Guaranteed Access Plan, the bills also
preserve Blue Cross's role under Public Act 350 of 1980 to contribute to
affordable, accessible health care for the people of Michigan. The Blues
released a report today, based on an independent examination of the company's
financial obligations under PA 350, that confirms that BCBSM pays back nearly
five times the value of its state and local tax exemption -- at least $391
million in 2007 social mission spending compared to $80 million in tax breaks
as a nonprofit corporation.
"Blue Cross's mission and our financial obligations go far beyond insurer
of last resort," Hetzel said. "Michigan can create a guaranteed access system
to stabilize the market, while still having the benefits of Blue Cross as the
insurance safety net, accepting everyone and paying millions to promote
affordable coverage for seniors, children and families in transition from
employer plans. We really have an opportunity, through this reform, to provide
real health security for Michigan consumers."
Blue Cross Blue Shield of Michigan is a nonprofit corporation and
independent licensee of the Blue Cross and Blue Shield Association.
SOURCE Blue Cross Blue Shield of Michigan
Helen Stojic of Blue Cross Blue Shield of Michigan, +1-313-225-8113
