Blues Cross mutualization passes state legislature

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Blue Cross Blue Shield of Michigan is one step closer to becoming a nonprofit mutual insurance company as two bills allowing the shift headed to the governor's desk Thursday.

The state House approved the bills (S.B. 1293 and 1294), which included a few changes from the original versions. After the Senate agreed to the changes, the bills moved out of the legislature and now await Gov. Rick Snyder's signature, reported the Detroit Free Press.

One such change under the final bill is that Blue Cross no longer can use "most favored nation" clauses in its provider contracts to secure better rates than its competitors, the Lansing State Journal reported.

Additionally, Blue Cross must contribute a "fair share" of its hospital reimbursements to underfunded government programs and uncompensated care. The insurer also must allocate $120 million to help subsidize Medigap coverage, Michigan Live reported.

Although Blue Cross said the legislation provides the state with a "modern system of regulation" while leveling the industry's playing field, consumer advocates remain strongly opposed to transitioning the insurer to a mutual company, the Free Press noted.

"While the Michigan House should be applauded for making some substantive improvements, this deregulation scheme still reduces access to coverage and effectively guarantees skyrocketing insurance premiums for individuals and small businesses," Michigan Consumers for Healthcare Director Don Hazaert said in a statement. "This deal eliminates all meaningful rate review on Blue Cross going forward and effectively allows a monopoly to set insurance rates in Michigan."

To learn more:
- read the Detroit Free Press article
- see the Lansing State Journal article
- check out the Michigan Live article

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