Lawmaker: State health reforms still needed for individual market
By Mark Sanchez, Business Review West Michigan
In pushing new legislation that would change the rules over the growing individual insurance market in Michigan, Sen. Tom George argues that the state simply can’t wait for federal reforms to take effect.
Provisions in the federal reform law that guarantee coverage don’t begin until 2014.
In the meantime, there remain 1.3 million people in Michigan who lack health coverage and Blue Cross Blue Shield of Michigan continues to incur heavy losses on individual policies.
The Blues lost $280 million in 2009 on the individual market alone, or $1.25 for every $1 generated in premium revenues.
“There remains a need to act, regardless of what happens in Washington,” said George, a Republican from Kalamazoo and chairman of the Senate Health Policy Committee.
George and his House counterpart, Rep. Mark Corriveau, D-Northville, introduced identical bills last week they say are designed to make individual coverage in Michigan more accessible and affordable.
Their proposal would prevent insurance carriers from limiting or excluding coverage for pre-existing conditions for people moving from the group to the individual market or from canceling coverage, lower the waiting period for pre-existing conditions from 12 months to six months, and increase the age people can receive coverage under a parent’s heath plan to 26.
The bills would create an insurance pool to reimburse insurers for medical claims of $80,000 to $800,000 on individual polices. All insurers, including Blue Cross Blue Shield, would have to pay into the pool. Blue Cross Blue Shield's assessment would equal the value of its state tax-exempt status, George said.
They also would create health plans with two type of policies with low-cost, minimum benefit packages that include a coverage guarantee and which every insurer in the individual market would have to offer. The MI-Health plans would emphasize wellness and prevention, George said.
The proposals from George and Corriveau come after they each introduced individual-reform proposals more than a year ago. Their bills lack a purchase mandate, which was a key element of Corriveau’s 2009 proposal.
“This is a middle ground that addresses Blue Cross Shield’s issues and retains a competitive marketplace,” George said.
Blue Cross Blue Shield reacted cautiously to the bills, as did the trade association for HMOs and commercial insurance carriers.
Mark Cook, vice president for governmental affairs for Blue Cross Blue Shield of Michigan, said “it’s appropriate for Michigan’s leaders to put new regulations in place that improve our system immediately for people who are struggling to find health coverage because of their pre-existing conditions and those who are finding it difficult to afford coverage.”
“However, Blue Cross believes that these bills need some changes to reflect provisions of federal health care reform and ensure fair taxation and regulation among insurance carriers.”
Rick Murdock, executive director of the Michigan Association of Health Plans, said any state reforms needs to balance with federal action to prevent redundancies, he said.
“We now need to take a step back and look through the lens of federal reform and mostly what Michigan needs and doesn’t need because federal reform is a gamechanger,” Murdock said.
If the George-Corriveau bills were to pass this year, it would take a year or two to implement their reforms, which would bump them up against the implementation of federal reforms.
“We’re not saying don’t do state reforms,” he said. “We’re saying let’s make sure any state reforms not only complement but facilitate seamless implementation of federal reforms.”
George hopes legislators can begin considering at the spring break. While he believes they represent a good bipartisan compromise, there is room for changes, he said.
“There is opportunity for more modification as we move along, but we have a very sound framework to move forward,” he said.
The original article on MLive can be seen here.
Posted: 4/5/2010