LANSING, Mich. (AP) — The Michigan Legislature took its first steps Wednesday toward tackling a proposed overhaul of the state's largest health insurer, Blue Cross Blue Shield of Michigan.
Senate Insurance Committee Chairman Joe Hune introduced bills that would end the nonprofit health insurer's tax-exempt status and align it with competitors. The proposals come at the recommendation of Republican Gov. Rick Snyder, who said last week he aims to "level the playing field" for insurers and modernize the only Michigan company that has to provide insurance coverage regardless of a customer's health status.
In exchange for operating as the state's so-called insurer of last resort, the charitable trust that serves about 4.4 million Michigan residents has saved about $100 million in local and state taxes annually. Under the legislation, Blue Cross would pay those taxes and contribute about $1.5 billion over 18 years to a nonprofit entity that would take on some of Blue Cross' "social mission" work — improving public health and health care access, particularly for children and the elderly.
Blue Cross in Michigan wouldn't be sold or lose its nonprofit status but would become owned by policyholders. It would join 11 other Blue Cross Blue Shield companies nationwide structured as mutual insurers, and those companies operate in 18 states.
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