West Michigan Association of Health Underwriters

Blues Bills, A Battle On Not?
Today at a Capitol press conference Senate and House health policy committee chairs Sen. Tom GEORGE (R-Texas Twp.) and Rep. Marc CORRIVEAU (D-Northville) announced individual health care market reforms. Fairly or not, in and around the Capitol the package is likely to be called the Blue Cross bills. 

In recent years, the Blue Cross label on legislation usually meant a legislative Armageddon. But that may not be the case this time around. The George news release today called the package a "bipartisan bicameral reform plan to make health insurance more affordable and accessible for Michigan residents." 

Health care industry sources told MIRS today that the package is bipartisan and bicameral. As for it being a "plan," both lawmakers admitted that there is still a lot of work to be done on the package. 

As for the measures making "health insurance more affordable and accessible;" that's subjective. But the same sources, some of which might have been expected to oppose the reforms, tell MIRS that -- as press conferences go -- the George and Corriveau one was actually pretty accurate. 

Nevertheless, this afternoon Attorney General Mike COX issued a news release in which he said he has "serious concerns" about a piece of the legislation introduced by Corriveau. 

"Just about a year ago we stopped an attempt by Blue Cross to kill oversight when they set rates on Michigan families," Cox said. "Today, we are once again looking at bills that would allow Blue Cross to raise rates with no Attorney General oversight on people already struggling to afford care. They should have introduced these bills on Groundhog Day, not April Fools' Day." 

The complaints Cox had with the legislation were that, as written, it would allow Blue Cross to offer new plans that eliminate the ability of the Attorney General's Office to question rate increases on Michigan residents who purchase their own insurance. In addition Cox claims the package would eliminate rate setting oversight for currently existing policies. 

So, does this signal that there will be a battle royal over the legislation? Not necessarily. 

At the news conference today MIRS asked George if he thought the prospective legislation could actually pass in this election year. 

"I think there's a good likelihood that this would pass," George said. "I think we have a very good framework to start with. I'm expecting that it's going to pass and become law." 

According to the sources MIRS contacted today under condition of anonymity, assuming the package continues to be re-crafted, George will probably be proved right. 

The statement, "The last thing we need right now is for Michigan's health industry to get into a fight" was repeated more than once today. In addition, all sides of the health care community are aware that any truly contentious measures in the Legislature could probably be scuttled pretty easily in a year like this one. 

Corriveau did say today that the current legislation would allow some rate increases if they were in line with a national trend, but otherwise the AG's powers would be preserved. 

But it seems likely that Cox's problems with the legislation would have to be resolved to his satisfaction - or passage would be severely endangered. 

On the other hand, legislative debacles are always possible. 

It also appears likely that people in Michigan's health care industry will be pouring over the package (which has already evolved considerably) during the next two weeks. So, the thinking is that whatever gets to the House and Senate floors will likely be well vetted and the results of a good deal of consensus. 

Does that mean the legislation would be meaningless? Not quite. 

"One of the things Senator George and I agree on is that health insurance isn't the same thing as health care," Corriveau said in reference to the package. "And I can say 'Yes, there are [real] reforms in here.'" 

At the news conference today both lawmakers fielded questions about whether the legislation would be needed in light of the federal health care reform bill, which has been signed into law. 

"Regardless of events in Washington, there are important things that we need to do in the state of Michigan to make health insurance more affordable and accessible and to make people healthier," George said. "These things are necessary and should not wait." 

The sources MIRS tapped today concurred. There is almost universal agreement that parts of the prospective package include needed legislation that should be enacted. 

However, much of the measures in the package (such as the consumer protections) are basically seen as redundancies of the federal legislation. In fact, one oft-heard question today was how much of the package would even be needed. But actually redundancy has rarely been a barrier to passage in the Legislature. 

The description of the package handed out at today's news conference included a disclaimer stating the document reflected compromises made prior to the final passage of Federal Health Care Reform. This appears to be yet another sign that the package is still a work in progress. Here is the document: 

Consumer Protections 
- Ends practice of cherry picking by requiring all carriers to offer guaranteed issue health plans regardless of ones health. 
- Coverage limits for pre-existing conditions is reduced from 12 to six months. 
- A carrier cannot limit or exclude coverage because of a pre-existing condition for those moving from group coverage to individual coverage. 
- Prohibits insurance plans from rescinding plans after an initial application. 
- Individuals up to age 26 can be covered under a parent's health care plan 
- Ends the practice of hiking up rates once an individual becomes ill. 
- Ends gender discrimination in the purchase of health insurance. 

Market Place Reforms 
- A revised, modified file and approve rate-filing process for commercial carriers, which ensures that 100 percent of the individual market will be subject to Insurance Commissioner oversight. 
- The MI-Health Board is created to help develop the Standard and Enhanced Guaranteed Issue Health Plans. The board will be composed of a variety of insurance carriers, health professionals and actuarial experts, as well as a consumer advocate who is a member of the general public. 

Affordability 
- Creation of the MI Catastrophic Protection Plan (MICAPP) to rein in the soaring cost of health care. 
- A Healthcare Affordability Fund will be established. Money in the fund will be used to subsidize the cost of the Standard and Enhanced guaranteed issue plans for Michigan residents with a household income up to 300% of the Federal Poverty Level. 

Making Michigan Healthier 
- Premiums encourage less smoking. 
- Premiums reward healthy body mass index (BMI).
- Premiums encourage compliance with screening and other healthy behaviors. 
- Will lower the number of uninsured. 

Bernero Hits Dillon On Health Care Comments
Democratic gubernatorial candidate Virg BERNERO took a swing at his primary opponent, House Speaker Andy DILLON(D-Redford Twp.), today in light of a MIRS story published Friday in which the Speaker said he was "not sure" on his position on the federal health care reform bill recently signed into law (See "Dillon 'Not Sure' On Health Care Reform Bill," 3/26/10). 

This morning, the Bernero campaign penciled in time with television and radio media, including making an appearance on WJR's Frank BECKMANN Show to club Dillon for his indecision on the issue. At 12:15 p.m., he crossed Capitol Avenue from his office at Lansing City Hall to the sidewalk leading up the state Capitol to hold court with print reporters. 

"How is it that Andy Dillon can't make up his mind about something this important," Bernero said. "It makes it hard to understand why Andy Dillon would be against that, or would not be able to make up his mind. His failure to support this historic reform is a slap in the face for these who need affordable health care." 

The media availability comes after Dillon was asked specifically by MIRS if he would have voted for the national health care reform bill. His response was, "I haven't read it. It's about 2,000 pages long. I'm not sure." 

Bernero confessed that he hasn't read the 2,000-page bill either, but said that he trusts the reports that he's read on the subject and the expertise of Michigan's Congressional delegation, led by U.S. Rep. John DINGELL (D-Dearborn) to have delivered a good product for Michigan and its residents. The bill, isn't perfect, he said, but trying to make "perfect" in Congress or the state Legislature is like "waiting for the Great Pumpkin. It isn't going to happen." 

"It's a solid good. I'm happy to support it the way it is," he said. "This is complex and as governor I want to work to implement it by getting together the best and brightest and figuring out how we can move forward as a state." 

Dillon's campaign spokesman Ken COLEMAN responded to the Bernero media blitz with the following statement: 

"Just to be clear, Andy has been on record supporting this dozens of times. He is also more concerned with how the state implements a 2,000-page law concerning a critical policy improvement than hollow rhetoric. 

"We find this type of criticism from the nation's Angriest Mayor disingenuous at best, given the strong belief we have that citizens are desperately wanting a thoughtful approach to making sure this law gets implemented to the benefit of millions of Michiganders." 

Bernero described the comment as the campaign trying to "send mixed signals." 

"At this point they are beginning to do some backpeddling that would rival that of a circus clown on a unicycle, but I guess that's politics," he said. 

Dillon made headlines last year with his proposal to combine all public employees into a single health pool as a way to cut costs and save the state and local governments $900 million over time. The plan is still be examined by a House subcommittee. 

Bernero didn't embrace the proposal when asked specifically by the media today, but did say the concept should be on the table as government looks for ways to cut costs. 

"We should work with our public employees and businesses to arrive at savings," Bernero said. "The approach he took, excluding the labor community is not the way to go. I believe the savings are overstated and if I were to pursue that, I'm not sure if it can be done, but it's one of the options that should be discussed." 

State Health Care Redux; Officials Hope This Time Is It

It's been more than two years since an effort to reform the state's individual health care insurance market with proposals largely backed by Blue Cross Blue Shield of Michigan crashed and burned in a lame duck session of the Legislature. But with new legislation, worked on behind the scenes for nearly a year, and support from a bipartisan, bicameral group of legislators, the chairs of legislative Health Policy committees said Thursday they think this time they've got it right.

However, work on the new legislation (SB 1242 , SB 1243 , SB 1244  and SB 1245 ) comes on the heels of federal health care reform that has left many sifting through its implications. House bills will be formally introduced after the spring recess concludes.

And Attorney General Mike Cox, who steadfastly opposed the Blues legislation two years ago and who has filed a lawsuit challenging the constitutionality of the federal reforms, expressed "serious concerns" with the new legislative package.

Some of the Michigan proposals mirror that of the federal government, including allowing people up to 26 years of age to stay on their parent's health insurance, but while reforms at the federal level will roll out over the next several years, backers of the legislation said the state can't wait.

"We have to work under that umbrella (of federal reform)," said one of the lead sponsors, Sen. Tom George (R-Kalamazoo). "Regardless of what happened in Washington, there is still a need to move forward in Michigan."

Mr. Cox and Mr. George are running for the Republican gubernatorial nomination.

The package calls for all insurance carriers to offer guaranteed-issue health plans regardless of a person's health and takes the value of the Blues' tax-exempt status, worth roughly $90 million, to create a fund that would subsidize a standard and enhanced version of these plans.

Subsidies from the fund would help cover the cost of insurance for residents living in households where the income is up to 300 percent of the federal poverty line, or $66,150 a year for a family of four.

What would be covered under the standard and enhanced plans would be determined by a new MI-Health Board, which would be comprised of insurance carriers, health professionals, actuarial experts and a consumer advocate. Rep. Marc Corriveau (D-Northville), the other lead sponsor of the package, said how quickly that board would have to act is something the committee process will determine.

A catastrophic protection plan, paid for by the insurance industry, also would be created to pay for medical claims between $80,000 and $800,000. Unlike the Michigan Catastrophic Claims Association, which reimburses auto no-fault insurance companies for claims exceeding $460,000, policyholders would not see a separate fee on their insurance bill to pay for the new catastrophic pool.

While commercial insurance companies would see their rate approval review process time cut in half, the entire individual insurance market would be overseen by the state's insurance commissioner.

Insurance companies would provide premium incentives for people to quit smoking, have a healthy body mass index or engage in other healthier behaviors, while coverage limits for pre-existing conditions would be reduced from one year to six months.

"We know in Michigan we have poor health behaviors," Mr. George said.

Under the legislation, insurance companies also could not increase rates for people who get sick or limit or exclude coverage of a pre-existing condition if a person moved from group coverage to individual coverage.

The compromise proposal includes components of plans outlined by both chambers last year.

Those involved with the fierce debate two years ago were still weighing the new legislation, but Mr. Corriveau and Mr. George were more confident the proposal laid out will become law even if it sees some amendments.

"This bipartisan plan is a great example of what is possible when we recognize a problem, put politics aside and work together to find a solution," Mr. Corriveau said. "I am confident MI-Health will bring fairness, affordability and strong consumer protections to the citizens of Michigan."

In a statement, Mr. Cox said the legislation would eliminate consumer protections in the rate-setting process, although Mr. Corriveau said the attorney general would have the same amount of oversight the current law provides. Mr. Cox also criticized the package for not including some of his proposals for market reforms.

"Today we are once again looking at bills that would allow Blue Cross to raise rates with no attorney general oversight on people already struggling to afford care. They should have introduced these bills on Groundhog Day, not April Fools' Day," Mr. Cox said.

Rick Murdock, executive director of the Michigan Association of Health Plans, which represents HMOs and commercial insurers, said while his group doesn't have an official position on the package, he does believe there's better "good will" on this set of negotiations.

Taking the issue away from changes sought by the Blues to a format of dealing with the uninsured and making insurance coverage more affordable allows everyone to have a stake in that fight, he noted, as opposed to the debate two years ago, which was described as "toxic" (See Gongwer Michigan Report, December 18, 2008).

The federal health care reform has been a "game changer" for the industry, Mr. Murdock said, which is why the association is reviewing the state bills in the context of those recent changes. They hope to have a preliminary analysis of the bills completed as committees begin to meet after the legislative break.

In a statement, Mark Cook, Blues vice president of governmental affairs, said, "For three years, Blue Cross has supported reforms that ensure all health insurance companies doing business here are required to cover people with pre-existing conditions. We have worked with policymakers to create a fair and balanced system of regulation in Michigan to protect consumers. These efforts are worth continuing because they are the right thing to do for people."

But Mr. Cook, too, said given the federal changes, the bills would need some changes when it comes to taxation and regulation of insurance carriers.

Mr. Murdock said how this all ties in with the federal reforms will also be made clearer under the governor's new executive order creating a new council to oversee implementation of the changes (See Gongwer Michigan Report, March 31, 2010).

Gov.: Health Reform Not Unfunded Mandate For MI
The state will not have to pay the tab for national health care reform and will actually save a "pretty significant" amount of money, Gov. Jennifer GRANHOLM said at a press conference today. 

Expanding Medicaid to 375,000 more Michiganders is fully funded until 2017, she said, and after that the federal government will not cover less than 90 percent. Although the Governor did not have a dollar amount for the state's savings, she said it would come via better health care management for Medicaid recipients. 

"It's a very good deal for Michigan and our health care coverage," she said at Sparrow Hospital today. 

All of the Republican candidates for governor -- U.S. Rep. Pete HOEKSTRA (R-Holland), Attorney General Mike COX, Ann Arbor businessman Rick SNYDER, Sen. Tom GEORGE (R-Texas Twp.) and Oakland County Sheriff MikeBOUCHARD -- have claimed that the new law is an unfunded mandate for Michigan. 

Bouchard and George have alleged that Michigan will be on the hook for an additional $700 million in Fiscal Year (FY) 2011 for the Medicaid expansion. 

Granholm said there's an "awful lot of misinformation" about the law from Republicans, which she said preceded its passage. Like President Barack OBAMA did this week, Granholm stressed that the law is modeled on Republican presidential hopeful Mitt ROMNEY's Massachusetts plan. 

"I think it's elevated the level of fear across the country to a level that's not consistent with the facts," the Governor said. 

She was asked if Republicans have elevated the rhetoric to deny the President a win. Granholm said yes. 

"People understandably had concerns about (the law)," she said. "But the reality of those fears are not going to happen. There are no death panels -- none of that nonsense." 

MIRS asked if the Democrats would lose seats because of health care reform. While Granholm stressed she wasn't a "good political prognosticator," she said no. The Governor said that when citizens "have actual facts" that the law will extend coverage for children and give tax breaks to businesses and be a "job creator," she predicted it will be a "benefit for the Democratic side of the aisle." 

Cox has joined a lawsuit with 12 other attorneys general trying to repeal the new law. Granholm sent Cox a letter last week arguing that he doesn't have the right to file on behalf of the state (See "Gov Asks Cox To Pull Out Of Health Care Suit," 3/24/10). She also sent a letter to U.S. Attorney General Eric HOLDER along with three other governors pledging her support against the AG's suit (See "Is Cox Healthcare Lawsuit Moot?" 3/26/10). 

Today, she claimed victory that "he agreed to back off," as that suit would have been a "violation of the attorney-client relationship." Cox said Tuesday on Fox News that he will file on behalf of Michigan's citizens and not the state government. 

The Governor said she and Cox have not talked, but have "exchanged letters." 

Granholm said that the national reform meets the goal she set in 2006 for universal health care coverage in Michigan through a state plan. But she did say she would have liked to have seen a "more robust public option," although she acknowledged that expanding Medicare and Medicaid were public options. 

Granholm stressed that the new law transitions to a preventative care model from treating illness on the back end, which will save money. 

"We're going to see a complete paradigm shift in how this shapes health care to focus on prevention of illness rather than just treating it on the back side," Granholm said. "It certainly will be helpful for those who want to seek affordable health care options and want to have control of their health care." 

Granholm today signed Executive Order 2010-4 establishing both a Health Insurance Reform Coordinating Council and an ombudsman. She said she hoped to "take down the temperature" by providing citizens with information. A new Web site is at www.michigan.gov/healthreform. 

The Governor said the council has "nothing to do" with Cox's lawsuit. 

Department of Community Health (DCH) Director Janet OLSZEWSKI will chair the council. The E.O. also creates an Office of Health Insurance Consumer Assistance within the Office of Financial and Insurance Regulation (OFIR). OFIR Commissioner Ken ROSS will serve as ombudsman. 

The council will be composed of the directors of the DCH Medical Services Administration; the Department of Human Services; the Department of Technology, Management and Budget; and the Office of the State Employer. The state budget director and state personnel director also will be on the council. 

The ombudsman is to help provide consumers with information regarding health care insurance, assist with the filing of complaints and to ensure compliance with laws and regulations relating to health care insurance. 

"After waging a long and hard fight for this historic legislation, we want to ensure that we are doing everything we can to help citizens benefit under the new law," Granholm said. 

Olszewski acknowledged it would be a "multi-year effort" for the council, although appointments will probably expire when the next governor takes over. 

The ombudsman position is required by federal law, but the council is not. MIRS asked if there was concern that a new Republican governor who opposed health care reform might disband the council. 

Granholm Press Secretary Liz BOYD said she didn't think so, as there are issues for the State as an employer. But she said it remains to be seen what the next administration will do. 

The Michigan Association of Health Plans (MAHP) today endorsed the council. 

"Addressing something as complex as health care inevitably means issues that cut across various departments. We applaud the governor for bringing together directors of key departments such as community health and human services with those who have responsibility for information technology and regulation of health plans," said RickMURDOCK, executive director of MAHP.