AG challenges insurer's financial projections; Calls on lawmakers to stall legislation
Mike Cox (D)
LANSING, Mich. (Legal Newsline)-State lawmakers should stall legislation sought by Blue Cross Blue Shield of Michigan until the company provides detailed information about its finances, said Attorney General Mike Cox.
On Tuesday, two senior Blue Cross executives admitted to the Lansing State Journal that they incorrectly included a $210-million pension accounting adjustment into projections that it would lose that amount in 2010.
For his part, Cox, who says Blue Cross stands to make $2 million on individual market policies in 2010, has asked the Legislature to wait on the legislation until the state's insurance commissioner completes his every three year audit of Blue Cross.
"By Blue Cross' own admission, its claims of huge, immediate losses are false," Cox said. "These statements prove beyond a doubt that the legislature must hold these bills until after the current state audit is completed. Only then will we know the truth about Blue Cross' finances."
The Blue Cross legislation seeks to change the way individual health policies are regulated in the state.
Blue Cross, which is nonprofit, wants to be regulated more like private insurers, so it may do such things as immediately raise rates rather than have rate increases approved by state regulators.
Blue Cross Blue Shield of Michigan says it is seeking a rate increase to shore up its finances.
Currently, Blue Cross has more than 60 percent of the state's health insurance market. The company was established by state law as Michigan's insurer of last resort.
The legislation would ban so-called cherry picking by private insurers that currently allow them to reject applicants who are considered too costly to cover because they have pre-existing health problems.
From Legal Newsline: Reach reporter Chris Rizo at firstname.lastname@example.org.