Traverse City Record-Eagle

Business

March 6, 2013

Mich. Senate approves Blue Cross changes

LANSING, Mich. (AP) — The Republican-led Michigan Senate gave final approval Tuesday to a plan that would transform Blue Cross Blue Shield of Michigan into a customer-owned nonprofit, sending the legislation to Gov. Rick Snyder's desk without the anti-abortion language that prompted him to strike down the effort last session.

"The Blue Cross Blue Shield reforms are a top priority" for the Republican governor and pending final review he intends to sign the legislation, Snyder spokeswoman Sara Wurfel said in an email.

Supporters say the changes will improve competition by putting all insurance companies under the same set of rules. Opponents, including Republican Michigan Attorney General Bill Schuette, say the change could hurt seniors who rely on Medigap coverage.

Under the legislation, starting in 2014 Blue Cross would shed its charitable "social mission" and contribute nearly $1.6 billion over 18 years to an endowment working to improve public well-being and health care access.

The legislation will end Blue Cross' current tax-exempt status in exchange for providing insurance coverage regardless of a customer's health. If Snyder signs the legislation, the insurer will pay an estimated $1.8 billion in taxes to the state over the next 18 years.

The changes were approved by the Senate in late January. The House passed the bills last week, but they were sent back to the Senate to receive final approval on a minor change.

House Republicans last year included provisions that would prevent insurance plans from covering elective abortions without a supplemental policy. Snyder vetoed the measure partially because rape, incest and the health of the woman were not included in the definition of elective abortions.

Senior groups and Schuette who oppose the bill say when a freeze on rates for Medigap coverage ends in 2016 seniors will face high costs or potentially lose coverage. But the legislation allows for $120 million subsidizing Medigap plans for seniors from mid-2016 through 2021.

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