Seeking reform, MRA halts health plancontinued from page 1 “It is in the best interest of our members to set aside our new health plan in order to take advantage of a unique opportunity to bring about cost-saving changes in the overall health insurance system and its largest insurer, Blue Cross Blue Shield of Michigan,” said Larry Meyer, MRA chairman and CEO. “We have always preferred a global solution over a Band-Aid approach to the health insurance crisis in this state,” added James P. Hallan, MRA president and chief operating officer. “Suddenly, the timing appears right for real reform. Just since we put together our new health plan, the key players have begun to focus on a broad solution.” The Association in January announced a new partnership with Michigan Farm Bureau to offer a health plan targeted at sole proprietors, the group hardest hit by spiraling health premiums. The program, which was to begin March 1, was to offer age-rated and medically underwritten policies that would provide significant savings for younger and healthier MRA-member sole proprietors. Although the new plan could help younger, newer retailers, the possible loss of young and healthy members from MRA’s other Blue Cross plans had the potential to add to the Blues’ long-term financial woes. The decision to put the new plan on hold was reached after Blue Cross and Governor John Engler each, separately, made insurance industry reform a top priority for this year, according to Meyer and Hallan. “We’re going to be part of the industry-wide solution,” Meyer said. “We’re optimistic that positive changes will occur.” Blue Cross currently covers nearly five million people, about half of Michigan’s population and three-quarters of the state’s small businesses. It is required by law to provide insurance at a “reasonable cost” and serve as the “insurer of last resort”—meaning it must accept all who apply for coverage, regardless of age or health. A state audit released last September raised concerns about trends that threaten the Blues’ long-term financial future. The Blues’ small business group lost some $400 million from 1995 to 2000, resulting in average annual premium increases of 40 percent in recent years. In his January State of the State Address, Gov. Engler called for changes in the way Blue Cross operates, including a restructuring of its board of directors. At press time, details of the governor’s proposal were expected to be released by state Finance and Insurance Commissioner Frank Fitzgerald, whose office had issued the audit. Following the audit, Blue Cross formed the statewide Coalition for Health Care Reform to push for industry changes and, in February, released details of its own package to improve the competitiveness of the small-group market. The Blues says its proposals are based on model legislation drawn up by the National Association of Insurance Commissioners and have been adopted in some form by 47 other states. Its proposals would enact market and rate reforms that would limit rate increases by all insurers and prevent commercial carriers from “cherry picking” the youngest and healthiest subscribers. The Legislature has formed a special committee of five Republican and four Democratic lawmakers to examine health insurance industry issues, including the Blue Cross and Engler Administration proposals. Rep. Judie Scranton (R-Brighton) chairs the committee. “There will be much debate over these proposals, and it’s too early to predict the outcome in the Legislature,” said Hallan. “The important thing is that there are serious proposals on the table now, and lawmakers are expected to act. We strongly support the overall effort to enact reforms that enable small business owners to provide affordable health benefits to themselves and their employees.” |