LANSING, Mich. (AP) — The Republican-led Michigan Senate gave final approval Tuesday to transform Blue Cross Blue Shield of Michigan into a customer-owned nonprofit, which supporters say will prepare Michigan's insurance industry for changes coming under the federal Affordable Health Care Act.
Opponents, including Republican Michigan Attorney General Bill Schuette, remain concerned that the change could eventually hurt seniors who rely on Medigap coverage, a Blue Cross program that covers the expenses not reimbursed by Medicaid. But the bill is being sent to Republican Gov. Rick Snyder's desk without the anti-abortion language that prompted him to strike down similar legislation last session, and Snyder spokeswoman Sara Wurfel said in an email that pending final review he intends to sign the measure this time around.
Under the legislation, 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 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.
The company says the change will allow the state to regulate all insurers under the same guidelines and operate a functional online health exchange, where the uninsured and business owners can shop for insurance starting Oct. 1. Establishment of a health insurance exchange is required under the federal health care law.
The legislation also would end the company's 33-year tax-exempt status given in exchange for Blue Cross providing insurance coverage regardless of a customer's health. When parts of the federal Affordable Care Act go into effect in 2014, all insurance companies will be required to provide coverage regardless of customers' pre-existing conditions.
That means if Snyder signs the legislation, the insurer will pay an estimated $1.8 billion in taxes to the state over the next 18 years, and there will be competition among insurers for high-risk individuals for the first time in three decades, Blue Cross Blue Shield spokesman Andy Hetzel said.
Schuette and senior advocacy groups who oppose the bill say seniors will face high costs or potentially lose coverage altogether when a freeze on rates for Medigap coverage ends in 2016. The legislation allows for $120 million to subsidize Medigap plans for seniors from mid-2016 through 2021, but Schuette has said that will not be enough to replace the current $180 million annual subsidy for Medigap.
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 he said it would have required women to buy separate coverage for abortions in cases of rape, incest or in which their health was in jeopardy.
Senate Bill 61-62: http://1.usa.gov/YTxmyk