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Blue Cross official stresses urgency of overhaul

Associated Press Modified: November 14, 2012 at 12:22 am •  Published: November 13, 2012

Among the things he'd like to see is a system where all insurance companies abide by the same rigorous, prior-approval rate-setting process and are subject to oversight by the state attorney general, as Blue Cross is now. Commercial insurers file their rates and undergo a 30-day review process by state insurance regulators.

"We don't have to level the playing field by eliminating all the rules," Hazaert said.

Under the law, Blue Cross also would be required to contribute up to $1.5 billion over 18 years to a nonprofit foundation that would take on some of Blue Cross' "social mission" work — improving public health and health care access, particularly for children and the elderly.

Cook disagreed that Blue Cross would be deregulated; rather, he said, all insurers' rates still would be subject to the state insurance code and federal law. He also questioned whether the federal Centers for Medicare & Medicaid Services would allow such a waiver in the first place.

Hazaert and others also said that lawmakers should revise sections of the legislation that relate to the creation of the charitable foundation. Some said it should guarantee the amount and timing of the funding and clearly spell out who has oversight of the foundation beyond a governor-appointed board. Hazaert's consumers' group recommends pursuing a "guaranteed stock option" approach, in which Blue Cross would conduct a full, fair-market valuation of the organization and pledge to submit its profits to the foundation over time.

Committee Chairman Pete Lund said such alternatives to the structure of the foundation are worth considering. His only requirement is that money is properly set aside and protected for Michigan residents.

He's planning two more Blue Cross-related hearings and believes those sessions, coupled with numerous meetings and hearings held earlier this fall by the Senate, are appropriate preparation for the legislation to come before a full House vote by year's end.

"Kicking it down the road just to kick it down the road doesn't make any sense," he said.