Blue Cross and Blue Shield of Michigan (BCBSM) would lose its tax-exempt status under a new proposal unveiled by Gov. Rick Snyder on Tuesday. According to a quote by the Associated Press, Snyder said that doing so will "level the playing field," bringing Blue Cross Blue Shield of Michigan in line with the state's other insurers.
Blue Cross and Blue Shield of Michigan, which is a non-profit insurer, currently provides health insurance for some 4.4 million residents. It is referred to as a "last-resort" insurer, which means that a person cannot be refused coverage.
Here is some of the key information regarding Snyder's plan to overhaul BCBSM.
* In a statement released by the company on Tuesday, BCBSM CEO Daniel J. Loepp stated that Snyder's plan, "is not exactly what Blue Cross would have proposed, but it does create a fair and balanced set of rules for health insurance."
* Loepp also said in the company's statement that BCBSM's board is "open to considering this proposal" because it will allow BCBSM to maintain the core objectives that it has had as a non-profit.
* According to MLive, BCBSM had been looking to revamp Public Act 350, the 1980 law that dictates how the company must operate. Snyder's plan reportedly goes several steps further than the changes that BCBSM was proposing.
* Eliminating BCBSM's tax-exempt status is expected to result in the company having to pay approximately $100 million in tax revenue each year, which will be offset by some $200 million in savings generated by no longer having to pay to subsidize particular programs.
* In addition, BCBSM must pay an estimated $1.5 billion over an 18-year period to establish a new nonprofit to address public health and wellness, that will have its own independent board of directors.
* Michigan Attorney General Bill Schuette may not be a proponent of Snyder's plan. The Detroit News quoted Schuette's spokesperson, Joy Yearout, who stated that Schuette "has significant responsibilities under state law to oversee Blue Cross and protect charitable trustassets," and that any discussion of moving BCBSM to for-profit status "requires a thorough, complete, and independent review" of the company's assets to make sure that "any new structure fulfills its longstanding mission...to protect Michigan's most vulnerable citizens."
* Snyder has argued that much of PA 350 will be rendered obsolete by the measures contained within the federal Affordable Care Act, including BCBSM's requirement that it must offer coverage to everyone, regardless of pre-existing conditions.
* The proposal, which if it goes through would take effect on January 1, 2014, must be approved by both the state Legislature and BCBSM's board of directors before it can move forward.
Vanessa Evans is a musician and freelance writer based in Michigan, with a lifelong interest in politics and public issues.
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