Blue Cross Blue Shield of Michigan (BCBSM) is our state's insurer of last resort. As the insurer of last resort it is their "mission" to make health care available to all residents in our state. In return for this public obligation, BCBSM receives tax-exempt status from all state and local taxes.
These bills would also allow Blue Cross to use their tax-exempt status to unfairly compete against other Michigan insurers by expanding their monopoly in to other lines of insurance like auto and homeowners. Under these bills they could spend their funds buying any other company including sub-prime loan companies, real estate ventures, even out of state companies and other risky ventures – instead of spending funds from Michigan rate payers to lower the cost of health care.
Now BCBSM is pushing bills HB 5282-5285 that would force their public obligation onto all insurers in the state, while allowing BCBSM to retain their tax-exempt status. BCBSM and their affiliates already control 70% of the commercial insurance market in Michigan and have made consolidated profits of over a million dollars a day, before federal income taxes, over the past 5 years.
BCBSM is asking the Legislature to give them an even greater competitive advantage over other insurance companies in the state, that will most assuredly reduce the competitive market and with it reduce consumer’s health care choices and increase premiums. We believe BCBSM’s efforts contradict their “mission” and will hurt the overall quality of health care provided in our state.
In short, our coalition is asking Blue Cross Blue Shield to put MI people first.
The BSBSM legislative scheme would:
- Eliminate Oversight and Accountability of BCBSM - Change rate filing to “file and use.” Which would eliminate the ability of the Office of Financial and Insurance Services (OFIS) to hold hearings on BCBSM rate increase requests.
- Reduces Accessibility and Affordability - Allow BCBSM to raise rates at will and without oversight. Reduces rating flexibility for other insurers and increases rates on some individuals.
- Raises Health Care Premiums - BCBSM will have the ability to raise rates without OFIS approval and eliminates Attorney General’s ability to challenge their rate increases.
- Creates a Bluesopoly - Allows the Blues to use their tax-free profits to purchase any other business, including out of state companies, to unfairly compete with tax-paying businesses. The legislation also allows the Blues to sell auto, homeowners and business insurance instead of focusing their efforts on keeping health care benefits affordable.
- Reduces Competition - Gives unfair advantage to BCBSM, while placing the burden of their public obligation on entire industry while BCBSM retains their tax-exempt status.
- Increase BCBSM Domination of the Market - Unfair competitive advantages will only increase BCBSM’s 70% market share. Reduction in competition will only result in reduced health care choices and higher premiums.
