Government and Health Care

Blue Cross becoming 'de-regulated monopoly,' according to Michigan Association of Health Plans

November 29, 2012
| By Pete Daly |
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The head of the Michigan Association of Health Plans cites the new AMA study of the health insurance industry as evidence that Blue Cross Blue Shield of Michigan should not be allowed to become what he calls a “de-regulated monopoly.”

“This study again shows how important it is that Michigan not allow Blue Cross Blue Shield to become an de-regulated monopoly in our state, which will happen under the bill now in the House,” said Rick Murdock, executive director of Michigan Association of Health Plans.

“That bill must be amended to encourage more competition, including a mandate that Blue Cross not use its massive market power to force providers to sign contracts limiting competition with other insurers, and a requirement that the company pay its fair share of shortfalls in Medicare and Medicaid.

“Failure to include these provisions will mean Michigan’s insurance market will be dominated by the Blue Cross monopoly for decades to come — forcing companies and individuals to pay higher insurance rates than if our market was competitive,” added Murdock.

Murdock was referring to the study released by the American Medical Association this week which allegedly shows that “anticompetitive market power is widespread for each of the three most popular managed care plans in the U.S.,” and Blue Cross Blue Shield of Michigan has a “near-monopoly.”

Andy Hetzel, a spokesperson for BCBSM, countered that the AMA has an “annual tradition of taking a look at Blue market share around the country and then declaring the markets where Blue plans have a larger market share, as being uncompetitive.” He described it as a “30,000-foot view” that “really doesn’t take into account the reality of the marketplace on the ground.”

The MAHP represents 15 health care insurance plans involving 2.5 million Michigan citizens in Medicaid, Medicare and commercial insurance.

Gov. Rick Snyder proposed a restructuring of BCBSM to make it a nonprofit mutual insurance company that would annually pay $100 million in state and local taxes, and it would be regulated under the state Insurance Code like all other health insurance companies. BCBSM has endorsed Snyder’s proposal and there are bills in the Legislature to affect that change. Under Snyder’s plan, BCBSM would also contribute about $1.5 billion over 18 years to fund a new nonprofit entity launching initiatives to improve the health of Michigan residents.

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