by Doug Paterson, MPA, Director of State Policy, Michigan Primary Care Association
After nearly two years of debate, the policy chairs of the Michigan House and Senate Health Policy Committees, Senator Tom George and Representative Mark Corriveau, recently released similar versions of four bills (Senate Bills 1242-1245 and House Bills 6034-6037) that would change the individual insurance market in Michigan.
The bills create a MI-Health Plan. Insurers offering the plan would be prohibited from jacking up insurance rates on the sick, and a newly created fund would cover individuals who need the costliest care. The bills would create the fund by removing Blue Cross Blue Shield of Michigan’s tax-exemption status as the state’s current insurer of last resort. All other health insurers in the individual market would be required to contribute to this pool in proportion to the amount of claims they are expected to make in a calendar year. This fund would supposedly hold down the cost of health insurance in somewhat the same way Michigan’s Catastrophic Claims Fund seeks to moderate auto insurance premiums.
Under the proposal, all insurers would be required to issue coverage to applicants, no matter what their health status. Another fund called the MI Healthcare Affordability Fund would be created to subsidize coverage for low-income Michigan residents.
Consumer protections in the plan include reducing coverage limits for pre-existing conditions from 12 months to six months; preventing a carrier from limiting or excluding coverage because of a pre-existing condition for those moving from group coverage to individual coverage; prohibiting insurance plans from rescinding plans after an initial application; and enabling individuals up to age 26 to be covered under a parent’s health care plan.
The plans will be overseen by the MI-Health Board composed of insurance carriers, health professionals, actuarial experts, and a consumer advocate from the general public. Besides oversight, this board would determine many of the details still to be addressed such as benefits, subsidy levels and amounts, and polices and procedures related to enrollment.