Priority eyes highrisk outcome

August 2, 2010
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Legislators left their lone session last week without voting on whether to appropriate $141 million in federal funds for a temporary high-risk insurance pool, which Priority Health is slated to administer in dozens of Michigan counties.

Unless the Legislature approves the appropriation, the federal government would operate the pool in Michigan. Enrollment is expected to open in September under health care reform regulations.

“It's important that these contracts go to Michigan companies that create jobs for our workers — not companies in other states,” House Speaker Andy Dillon, D-Redford Township, who is seeking the Democratic nomination for governor in Tuesday’s primary election.

“I have been working with Senate Republicans and the governor on this issue, and I'm hopeful that we can reach a bipartisan agreement to bring this business and these jobs to Michigan.”

With the primary election on Tuesday, the Democrat-controlled state House is scheduled to meet again on Wednesday and the Republican-controlled state Senate on Aug. 11.

Priority Health, based in Grand Rapids and majority-owned by Spectrum Health, and Sparrow Health System’s Physicians Health Plan of Mid-Michigan would split the counties and the funding. The state Department of Technology, Management and Budget awarded the contracts to them, the only bidders, last week.

“There is going to be a high-risk pool, period,” said David Waymire, of Martin Waymire Advocacy Communications, who represents the Michigan Association of Health Plans. “The only question is whether Michigan jobs will be created or whether jobs will be created for a company outside of the state to manage that pool.”

Even as Democrats were casting the issue as a jobs-creator, it was unclear whether the two insurers would add many staff members.

Priority Health Associate Vice President of Communications Rob Pocock said the contract may create a few jobs, such as claims processors, but it would not mean a hiring surge.

“We believe managing this high risk pool would provide a boost to the local economy and create indirect and direct jobs,” added Rose Tantraphol, spokeswoman for PHP.

Part of federal health care reform, the high-risk pool would provide a health insurance option for people who have been rejected by other insurance companies because of pre-existing conditions and have been uninsured for six months. The program would be in place until 2014, when health insurance exchanges go into effect.

Federal high-risk pools began enrollment in July and coverage as of Aug. 1. The DTMB request for proposals asked for enrollment to begin in Michigan as of Aug. 15 and coverage in September.

Late last week, the DTMB was revising the number of counties Priority Health and PHP would each cover. In the original bid award, PHP would handle 26 counties and receive $37.36 million. Priority Health would cover 57 counties and receive $103.6 million.

“It’s still not a done deal,” Pocock said. “If the state chooses not to do that, residents of Michigan would have to enroll in the federal high risk pool.”

High-risk Michigan residents also would continue to have the option to buy health insurance from Blue Cross Blue Shield of Michigan. BCBSM did not submit a bid to run the federal high risk pool in the state.

Priority Health’s monthly premium rates would run between $154 and $616 in its North region; $163 and $652 in the East/West region; and $178 to $713 in the Southwest region, which will include the U.P.’s Alger County.

The State Administrative Board also would have to approve the contracts.

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