Group says it is troubled by an unfair, unlevel playing field.

The Blue Cross and Accident Fund Expansion bills enable Blue Cross Blue Shield to expand its unfair advantage into a monopoly rather than benefiting consumers by lowering rates, according to the Coalition For A Fair & Competitive Insurance Market, as published in a press release on the Web site www.bio-medicine.org.

On April 16, the Senate Health Policy Committee scheduled a hearing on Blue Cross Blue Shield of Michigan’s “Reform Plan” with special focus on the Accident Fund Expansion bills (H.R. 5284 and H.R. 5285). The bills, which have nothing to do with individual market reform, would allow Blue Cross to acquire any other company. The legislation would also allow the Accident Fund, a for-profit workers’ compensation subsidiary of BCBS, to expand from workers’ compensation insurance into other insurance lines such as home and auto insurance and even medical malpractice insurance, the release says.

In return for allowing the Accident Fund to expand into other insurance lines, Republican Senator Tom George from Michigan has proposed a substitute that would require the Blues to pay $100 million into a charitable fund that would provide subsidies to people who buy individual health insurance, the release says.

The Coalition released a study conducted by Hillsdale Policy Group economist Gary Wolfram, PhD, who said in the release, “These bills will create unintended consequences that will distort the insurance market, leading to less competition and higher rates for healthcare and other insurance. These effects will also seep into the Michigan economy as a whole and place a drag on our economy.

“Allowing the Accident Fund to cross over into other lines of insurance invites more subsidization of the Accident Fund by its parent,” Wolfram said in the release. “Rather than just buying out-of-state companies, the Accident Fund would be able to enter other lines of insurance using BCBSM reserves and notes, and access BCBSM provider networks and market power over providers.” 

The Coalition is also concerned with how the tax-exempt BCBS is now allowed to make large capital contributions to its profit subsidiaries, increase their surplus, and continue to raise premium rates for consumers. Blue Cross’ surplus is at its highest level in history and has more than doubled since 2001, the release says.

The Coalition is planning to testify that its members are not afraid of competition but are troubled by an unfair, unlevel playing field, the release says. There are more than 1,500 companies willing to compete for Michigan insurance business, and only one is asking the legislature for permission to abuse a tax exemption and monopoly leverage to compete, the Coalition says.