LANSING, Mich. (AP) — The state Senate on Thursday again approved an operational overhaul of Blue Cross Blue Shield of Michigan — the state's largest health insurer — about a month after Gov. Rick Snyder vetoed one of his top priorities because of last-minute abortion provisions added to gain some Republicans' support.
The bills that won unanimous approval no longer include language that would prevent insurers and businesses from providing elective abortion coverage in employee health plans. The plan now heads to the House, where its future is murkier because a new crop of lawmakers took office weeks after the Republican governor's veto.
The proposed reworking of Blue Cross does away with a law that gives the insurer immunity from paying about $100 million a year in taxes to state and local governments. In exchange for the tax breaks, Blue Cross provides insurance coverage regardless of a customer's health status. But Snyder says the insurer's special status is outdated especially with passage of the federal health care law.
Another key element is what supporters call regulatory reform and critics call deregulation. Rate change requests would be reviewed by the state insurance commissioner, as other insurers currently are, and no longer be subject to an extra layer of scrutiny by the state attorney general.
The proposed overhaul seeks to modernize but not sell Blue Cross, which is governed by a separate law from other insurers and typically waits longer for its rate changes to be reviewed. Streamlining regulations, supporters say, is particularly important as health insurers gear up for the federal Affordable Care Act to take full effect and get products and rates ready for an online health exchange where people can compare and buy their own insurance plans.
By transforming, Blue Cross also would shed its charitable "social mission" and contribute up to $1.5 billion over 18 years to a nonprofit foundation carrying on that work. The foundation would work to improve public health and health care access, particularly for children and the elderly.
Critics fear the social mission will be diminished, and advocates for the elderly are worried about insurance rate hikes coming with less regulation.
Senate Insurance Chairman Joe Hune, a sponsor of one bill, said by including a four-year rate freeze and a five-year subsidy of Medicap — which fills the gap in Medicare coverage for seniors — legislators are protecting seniors for nine years.
"This is good public policy," said the Republican from Livingston County's Hamburg Township. "It's been a long time coming."
Now the question is whether the House will pass the bills without the abortion provisions.
House Democrats voted against the Blue Cross legislation because, on the day it was approved in December, Republicans began passing a contentious right-to-work law that limits unions' power. Some House Republicans then would not back the legislation without abortion provisions.
Republican House Speaker Jase Bolger of Marshall wants to finish the Blue Cross changes, but no timeline has been set, spokesman Ari Adler said.
Blue Cross asked that the bills be passed and signed into law by the end of March.
"Our industry is facing a year of significant change with the opening of the health exchange," spokesman Andy Hetzel said in a statement. "Consistent regulations are necessary now, to enable a functional marketplace and ensure Blue Cross can participate on the health exchange along with our competitors."
Email David Eggert at deggert(at)ap.org and follow him at http://twitter.com/DavidEggert00