Blue Cross Blue Shield of Michigan could be forced to pay every Michigan resident $500--for a total of $5 billion--if a state lawmaker's proposal makes its way into legislation that converts Blue Cross into a nonprofit mutual insurance company.
Michigan Rep. Tom McMillin, who is concerned that the potential conversion will lead to Blue Cross eventually being sold to a for-profit insurer, wants Blue Cross to transfer $5 billion to the state's 10 million residents before the mutualization is finalized, the Detroit Free Press reported.
"Let's just be done with this--put out the $5 billion and then we don't have to worry about lobbyists lobbying for this change and that change over the next 10 years," McMillin said Friday.
The bill to shift Blue Cross into a mutual company calls for the insurer to contribute $1.5 billion over the next 18 years to a new and independent nonprofit entity that will fund programs to improve the state's healthcare.
"I'm not sure if $500 is the right number, but I'm putting it forward," McMillin said. "Instead of putting it in some foundation that might get $1.5 billion and might get nothing at all … give it to citizens now."
Blue Cross could disperse the $5 billion, which McMillin said was the value for the company's tax-free status as the state's insurer of last resort for 73 years, through rebate checks, income tax credits or an investment security in the new company, reported The Detroit News.
Responding to McMillin's proposal, Andy Hetzel, vice president of corporate communications for Blue Cross, said it was "dangerous" because "liquidating Blue Cross would jeopardize that financial security that people depend on their insurance company to have."