The passed the Blue Cross bills 92-18.
LANSING, MI — Blue Cross Blue Shield of Michigan is one step closer to becoming a nonprofit mutual insurer.
The GOP-led House on Thursday passed Senate bills 61 and 62. One of the bills was amended, so it needs Senate approval before heading to Gov. Rick Snyder for his signature. Both bills passed 92-18.
Snyder vetoed similar legislation in December after the House added language prohibiting health plans from including coverage for elective abortions unless the employer decides to offer the coverage to employees through an optional rider.
"We have chosen not to add the issue of abortion coverage as there is no agreement on language that would protect both women and their unborn babies, and because the House is keeping with its commitment to raise the value of life in this session through issues that unite us rather than divide us," House Speaker Jase Bolger said in a statement.
The bills allow Detroit-based Blue Cross to become a nonprofit mutual insurer, a structure that would allow it to more easily and quickly change rates.
Blue Cross has been exempt from paying state and local taxes because it offers coverage to people with pre-existing conditions. But that won’t be necessary starting January 2014, when the Affordable Care Act will require all insurers to offer coverage to everyone, regardless of health status.
Under changes recommended by Snyder, Blue Cross would be required to pay taxes and contribute up to $1.56 billion over 18 years into a separate nonprofit charged with continuing the insurer’s charitable mission.
“We applaud Gov. Snyder and the Michigan Legislature for recognizing the need for our state to have a modern and fair system of health insurance regulation, and for Blue Cross’ nonprofit mission to be preserved and sustained,” Blue Cross spokesman Andrew Hetzel said in a statement. “This legislation creates a truly competitive marketplace and sustains Blue Cross’ nonprofit contributions toward a healthier Michigan.”
Attorney General Bill Schuette and several senior advocates have criticized the bills, saying they don’t provide enough protections for those on Medicare.
A rate freeze on Medicare supplemental coverage, or Medigap, is in effect until 2016. Lawmakers added a provision that would require the new nonprofit fund to spend $120 million to subsidize Medigap rates for seniors, subject to a means test, through the end of 2021.
Schuette said the average $24 million per year allocation is not enough make up for the current $180 million annual subsidy. Advocates for senior citizens and people with disabilities also are concerned that Blue Cross would eventually stop offering its Medigap plans, which currently cover more than 200,000 people.
“We need a full and complete commitment to seniors, one that protects them from the looming Senior Cliff, which could cause skyrocketing Medigap rate increases for Michigan’s most vulnerable,” Schuette said in a statement. “When the existing Medigap rate freeze ends in 2016, hundreds of thousands of Michigan seniors will either face higher rates or be left on their own to find new coverage if Blue Cross drops the Medigap plans. That is unacceptable, and as a result, I cannot support the legislation.”
Related: State Rep. Andy Schor amendment to Blue Cross Blue Shield bill nets $600K for City of Lansing
Email Melissa Anders at manders@mlive.com. Follow her on Google+ and Twitter: @MelissaDAnders. Download the MLive app for iPhone and Android.
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