The nonprofit group had expected that the initiative it formed with the Michigan Farm Bureau would have saved sole proprietors substantial money on premium costs, possibly as much as 40 percent for some of its younger members. Blue Cross Blue Shield of Michigan was to have administered the program.
Instead, the MRA will delay the launch of a new plan until the results of an attempt to reform the health-insurance industry in Michigan are made public. BCBS, Gov. John Engler and a committee of nine lawmakers are all taking part in the statewide restructuring of the field, which, once again, has resulted in double-digit rate increases for state businesses.
“Our plan, while it would have benefited a certain segment of our membership, really amounted to a Band-Aid approach. What is needed is more comprehensive reform of the entire system, and it appears right now that the sun, moon and stars all are lined up in such a way that we have the best chance at reform that we’ve had in a long time,” said Tom Scott, MRA vice president of communications and public affairs.
Scott said the MRA feels good about the climate for change because Blue Cross has aggressively pursued reform, Engler made it a focal point of his State of the State address, and a bipartisan legislative group also is working on the issue.
“We don’t want to do anything that would jeopardize that in the least,” said Scott. “So in the spirit that we believe there is going to be overall reform, we decided to hold back on our much smaller plan and try to be part of the overall reform effort.”
The MRA also was concerned that its new plan would cause a number of its members to leave existing BCBS plans and put the insurer in even a tighter financial bind than it is in now. The Blue Cross small-business group lost about $400 million from 1995 to 2000. The nonprofit provider insures roughly two-thirds of all the state’s small businesses.
BCBS has proposed changes that would limit rate increases from all insurers and prevent commercial carriers from concentrating on signing the youngest and healthiest subscribers to their plans. Under its current charter, Blue Cross must provide coverage at a “reasonable” price and accept everyone who applies regardless of age or health condition.
The MRA is expecting Engler to reveal his recommendations soon, certainly before the end of the month. The governor will release his thoughts on reform through Finance and Insurance Commissioner Frank Fitzgerald.
In the legislature, a committee of five Republicans and four Democrats is examining health-insurance industry issues. The lawmakers also are looking into the proposed changes made by Blue Cross and will look at the governor’s recommendations. Rep. Judie Scranton, R-Brighton, chairs that committee.
The MRA has 5,500 members that operate 12,000 stores in the state.
“The bottom line is we hope we get an insurance system that avoids these continual double-digit increases, not just double-digit, but 20, 30 and as much as 40 percent,” said Scott. “That shows the system is broken and there needs to be changes.”