Blue Cross to be nonprofit

Governor Rick Snyder recently proposed major changes to the regulation of Michigan’s largest healthcare provider. The governor is calling for Blue Cross Blue Shield of Michigan to become a nonprofit medical company that will be regulated under the Michigan

Insurance Code like all other health insurance companies in Michigan. The change would bring an additional $100 million a year in tax revenue to state and local governments.

Snyder’s plan will also require BCBS of Michigan to contribute about $1.5 billion over 18 years to a new nonprofit organization.

The goal of the new entity would be to “foster healthier lifestyles, provide better access to healthcare and improve public health.”

“This is an exciting opportunity to improve the health of Michiganders and create a modernized, efficient health care marketplace that spurs innovation and streamlines outdated regulations,” Snyder said in a statement. “This proposal will ensure that quality health care remains affordable and accessible
for everyone.”

The proposal requires approval from both the state Legislature and the Blue Cross board of directors.

“My board is willing to consider the proposal,” Blue Cross’ President and CEO Dan Loepp said.

“Blue Cross has long advocated for all health insurers to play by the same rules,” Loepp said in a statement. “This plan is not exactly what Blue Cross would have proposed, but it does create a fair and balanced set of rules for health insurance. Regulations should be fair to all. They should protect consumers, expand choice and competition and preserve an insurance safety net people can count on.”

According to a release by Snyder’s office, the governor’s plan would also:

- Protect senior citizens by freezing “Medigap” coverage rates for four years.

- Streamline the regulatory environment by regulating Blue Cross under the state Insurance Code, as is the case with all other health insurance companies.

- Preserve Blue Cross’ nonprofit status and mission while maintaining its contribution to Michigan’s economy and investments in the state.

- Eliminate the “tax” currently required on Blue Cross’ small-business and individual customers to subsidize other lines of insurance coverage. That tax costs small businesses and individual Blue Cross members more than $200 million a year.

- Ensure that Blue Cross continues as a carrier of last resort until Jan. 1, 2014, at which time new federal laws will require all insurers to offer coverage to anyone regardless of health status.

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