State eyes website encouraging insurance competition

January 3, 2012
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LANSING — Buying health insurance in Michigan could be a lot like buying vacation packages on travel websites.

To comply with federal law, Sen. Jim Marleau, R-Lake Orion, introduced a bill to create MiHealth Marketplace. It’s a website that compares health insurance packages and prices for people or businesses. A consumer could weigh options and compare the prices of multiple health care providers.

The hope is to create competition and lower the cost of health insurance, Marleau said.

State officials wanted the bill approved before the end of the year to meet federal deadlines and qualify for funding. The state senate passed the measure earlier this month.

In 2009, Congress made each state responsible for creating an affordable care act or adopting a federal plan.

Many people don’t think about health care packages and leave it up to their employer, Marleau said. But people need to start taking ownership of their health insurance, he said. The individual market is the fastest-growing sector in health insurance, Marleau said. Small businesses are not far behind.

Businesses with 50 employees or less and individuals would be eligible to shop for their insurance through the MiHealth Marketplace. In 2016, the marketplace would open up to businesses with 100 employees. Members of Native American tribes also would be eligible to shop at MiHealth Marketplace.

Health insurance is critical, said Shelley Edgerton, deputy director at Michigan’s Department of Licensing and Regulatory Affairs. When someone goes without, they either neglect their health or go into the emergency room because they are required to treat you, Edgerton said. The fees go back into the system and onto the shoulders of taxpayers, she said.

“We call it the hidden tax — where everybody pays for those people that don’t have health care that go to emergency rooms,” Edgerton said.

The website also will be used to prove Medicaid eligibility. It can check if someone is a legal citizen, already is receiving benefits or complies with other Medicaid requirements. It consolidates the work of many government agencies.

The system has to be very sophisticated, connecting about 30 health care providers and their computer programs with the marketplace’s computer program, Edgerton said.

Insurance companies say they need 18 months to get their software up-to-date to coordinate with the state’s software, Marleau said.

“The kids show up at high school and college; the first week, there is a (football) game,” Marleau said. “Well, the team has had to start practicing many, many, many weeks before that. They don’t just put a uniform on and play a game the first week school starts. The same goes for the insurance companies.”

The plan to get MiHealth Marketplace passed and running is on a tight schedule. The state can only apply for federal grants to implement the system quarterly and must prove it is moving forward with the idea to qualify.

Michigan officials planned to apply before the next grant deadline of Dec. 30, which was after the Business Journal went to press.

Oregon and California are moving forward with similar plans. The grants are only for startup. By 2015, the MiHealth Marketplace must be self-funded.

Federal officials will implement a similar program if states don’t do it by fall 2012.

If there must be such a program, state control is better than federal control, said David Jessup, director of government relations at the Small Business Association of Michigan.

Edgerton fears federal control could limit participation by Michigan businesses and insurance providers and harm competition.

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