November 18, 2008
 

    LANSING - Attorney General Mike Cox, Chuck Bell of Consumers Union, and Eric Schneidewind of Michigan AARP, today called on the Michigan Legislature to stop movement of controversial legislation being pushed by Blue Cross Blue Shield of Michigan (BCBSM).  The proposal would guarantee rate hikes on seniors and the seriously ill, eliminate financial oversight by the governor and attorney general, and allow BCBSM to purchase for-profit companies.
 

    "Allowing BCBSM to drift further away from its mission to be the insurer of last resort is the worst case scenario for our state," said Cox.  "No wonder they waited until after the election to try this."

    Cox is joined in the fight to protect Michigan consumers by the American Association of Retired Persons of Michigan (Michigan AARP).

    "AARP believes that any attempt to reform the Individual Health Care Market should have safeguards in place to ensure that those who are in need of access to adequate health care coverage are not priced out of the option," said Eric Schneidewind, state president for AARP Michigan.  "Blue Cross Blue Shield has historically been the state's insurer of last resort and we all benefit if they remain as such."

    Cox said that he, AARP and Consumers Union are fighting against the changes because they will hurt consumers who are already struggling.  These bills will hurt Michigan families by allowing Blue Cross to: 

• Eliminate oversight by the governor and attorney general, which will allow Blue Cross to raise rates without opposition.

• Deny coverage of pre-existing illnesses for 12 months, doubling the denial time.

• Charge new customers with chronic diseases, such as diabetes, up to 80 percent more.

• Charge new customers with series illnesses, such as cancer, up to 250 percent more.

    While Blue Cross claims it needs the legislative changes to stop individual market losses, Cox pointed out that the non-profit remains financially healthy.  Blue Cross has:

• Received an estimated $100 million per year in tax breaks in exchange for serving as Michigan's "insurer of last resort." 

• Grown its surplus to $2.96 billion.

• Increased executive pay by 53% from 2006-2007.

• Spent $493 million buying for-profit companies since 2005.

    Additionally, BCBSM has spent significant resources on efforts to pass these changes in the legislature.  It has reportedly hired six lobbying firms and four public relations firms, in addition to spending more than $1 million per month on advertising in support of its claims.

    Blue Cross executives claim they need to spend the non-profit funds on lobbying efforts to get the "appropriate" changes from the legislature. 

    "There is nothing appropriate about eliminating oversight and raising rates," said Cox.  "I strongly encourage citizens to contact their legislators immediately to voice opposition to these changes.  Their access to health care may depend on it."

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