BCBSM Bills May Get Vote

April 27, 2008
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GRAND RAPIDS — After nearly six months of hearings and testimony, a state Senate committee is expected to take action Wednesday on proposed insurance bills affecting Blue Cross Blue Shield of Michigan

Priority Health, the health plan owned by Grand Rapids’ Spectrum Health, backs an alternative from committee chairman state Sen. Tom George, R-Kalamazoo, which would do away with a controversial provision requiring all insurers to pay into a fund to cover high-risk patients.

“It is Priority Health’s position that the George-introduced bills do represent sound fiscal policy,” said Leon Lamoreaux, vice president of business development. He said the health plan opposes another alternative presented by committee member state Sen. Jason Allen, R-Traverse City, as well as the bills passed last fall in the state House. Allen’s proposal includes the high-risk pool.

BCBSM is seeking legislative action to reform the individual health insurance market, which is widely expected to quadruple from 6 percent of the market today.  The nonprofit, Michigan’s largest health insurer, also wants approval for its for-profit subsidiary, worker’s compensation insurance provider The Accident Fund, to sell other lines of insurance.

Lamoreaux said he thinks creation of a high-risk pool would increase premium prices for everyone’s health coverage.

“It is more than speculation,” he said, citing studies introduced during the committee’s deliberations that indicate price hikes among the 34 states with high-risk pools. He stopped short of saying Priority Health plans to raise rates in the wake of an introduction of a high-risk pool.

The company’s rates have increased an average of 8 percent to 9.5 percent this year, he added.

“The industry would likely experience an increase in rates just to cover the unknown, unfunded liability that would be required to subsidize the high risk pool,” Lamoreaux said.

As vice chairman of Blue Cross Blue Shield of Michigan’s board, Dr. John MacKeigan, chairman of Michigan Medical PC, Grand Rapids’ largest physicians group, recently professed mixed emotions over the huge market share BCBSM enjoys and its nonprofit status, which he said he thinks suppresses payments to physicians. But he supports the insurer’s position and backs the idea of a high-risk pool with costs for expensive patients shared among all insurers in the state.

“If Blue Cross does not get some relief and help from other insurance companies on the insurer of last resort, then they won't be able to compete with other large national companies and they'll be gone, and we'll see some of the effects of that with higher uninsured, more selection (cherry-picking). It will only take one auto contract or two auto contracts lost by Blue Cross, or this bill not going through, and they're going to have a lot of trouble,” he said.

Lamoreaux said that “pending the outcome of this legislation,” Priority Health intends to expand its offerings in the individual market. Priority Health, established as a nonprofit HMO, currently serves individuals through products for Medicare, Medicaid, state-mandated insurance coverage, conversion coverage through group health and a product for sole proprietors.

After the committee vote, the proposed bills would move to the full Senate. Bills approved by the Senate then would face further review by the state House, which passed the original bills last fall.

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