LANSING, Mich. (Legal Newsline) - Michigan Attorney General Mike Cox says there are 10 ways to improve health care in his state.
Cox submitted his recommendations to the state's Legislature Thursday, noting a need for reforms that will protect consumers against "unreasonable" rate increases while keeping Blue Cross Blue Shield the insurer of last resort.
"The Michigan Legislature has an extremely difficult road ahead due to the budget and other pressing policy issues," Cox said.
"I offer these points as guideposts to assist them as they consider health care reform. Blue Cross must remain a healthy and vibrant part of Michigan, but any reforms must also protect consumers."
In December, Cox called on state legislators to stall legislation sought by Blue Cross Blue Shield of Michigan until the company provides detailed information about its finances.
Blue Cross, a nonprofit organization, says it is projected to lose more than $260 million in 2009 and $300 million in 2010. It is seeking legislation that would ban 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.
In a letter sent to lawmakers, Cox made the following 10 suggestions:
-Maintain the current oversight powers of the Governor and Attorney General in the rate-setting process, preserving the power to ask questions and bringing transparency to the process;
-Provide for an alternative expedited hearing that gives Blue Cross increased market flexibility while retaining a fair and transparent rate hearing process for consumers;
-Maintain Blue Cross' status as insurer of last resort by tying its tax subsidy to the creation of any high-risk or guaranteed access pool;
-Protect consumers by shortening the pre-existing exclusion used by commercial insurers from one year to six months;
-Maintain use of Community Rating. However, if rate bands are allowed then Blue Cross must be required to keep them narrower than those used for businesses. Individuals should not be exposed to higher price fluctuations than businesses;
-Expand access to care by requiring Blue Cross to purchase a license and pay associated fees before granting it the unfettered ability to buy other companies. These fees would be used to create a fund which provides access to subsidized catastrophic care coverage for individuals and certain small businesses;
-Mandate that Blue Cross pay taxes on any surplus funds used in the purchase of other businesses;
-Make Blue Cross more transparent by implementing new reporting requirements for charitable expenditures;
-Require Blue Cross to report to the state when its reserves surpass excessive levels and prohibit reserves from growing too large, which generally means consumers have been charged too much; and
-Explore other areas to identify cost savings, including the concept of pooling segments of the individual market with segments of the small business market to lower rates for everyone, and to require an annual OFIR report comparing health care costs in Michigan to the rest of the nation.
From Legal Newsline: Reach John O'Brien by e-mail at firstname.lastname@example.org.