Snyder Calls For Overhaul Of Health Insurance Regulation

LANSING (WWJ) - Gov. Rick Snyder is calling for an overhaul of how Blue Cross Blue Shield of Michigan, the state's largest health insurance provider, is regulated.

Snyder wants Blue Cross to become a non-profit mutual insurance company and contribute money to a new entity that would provide better access to care.  He also wants BCBSM to be regulated by the state insurance code.  Since 1980, it's been exempt due to Public Act 350, which made it Michigan's insurer of last resort.

"This is an exciting opportunity to improve the health of Michiganders and create a modernized, efficient health care marketplace that spurs innovation and streamlines outdated regulations," Snyder said. "It's especially important that we have a system that promotes wellness for our children and seniors. This proposal will ensure that quality health care remains affordable and accessible for everyone."

Snyder's plan, which requires approval by the Legislature and the Blue Cross board of directors, follows his call in last year's Special Message to the Legislature on Health and Wellness to reinvent health care in Michigan so it can be a positive economic driver of the state's ongoing recovery.

- Read the specific's of Snyder's plan here - 

"Blue Cross has long advocated for all health insurers to play by the same rules," said Daniel J. Loepp, BCBSM president and CEO, in a statement. "This plan is not exactly what Blue Cross would have proposed, but it does create a fair and balanced set of rules for health insurance. Regulations should be fair to all.

"They should protect consumers, expand choice and competition and preserve an insurance safety net people can count on. Our board is open to considering this proposal because it preserves Blue Cross' nonprofit mission and sets Michigan's insurance market up for success in the future," Loepp said.

In addition to transitioning to a nonprofit mutual insurance company structure, officials say BCBSM would evolve its traditional "social mission" by funding a new nonprofit entity to be created by the state with contributions totaling approximately $1.5 billion, payable in installments over the next 18 years. The nonprofit would be governed by its own board, which would include the Michigan Attorney General. The board would be supported by a large and diverse advisory council comprised of community stakeholders. The nonprofit would use BCBSM contributions to fund programs to improve health care in Michigan and keep it affordable.

"The old way of doing business doesn't meet Michigan's demands today for a competitive and efficient health care system," Snyder said. "Michigan needs a new regulatory environment that continues our reinvention and allows us to attract the kind of investment that will fuel our comeback. This proposal will help us do that."

Loepp said Blue Cross will remain based in Michigan.