Will Blue Cross mutualization jeopardize exchange participation?

Now that Michigan lawmakers have reintroduced legislation to convert Blue Cross Blue Shield of Michigan into a nonprofit mutual insurance company, the state's insurer of last resort is raising concerns about the bill's timeline.

Blue Cross is particularly worried that it might miss a crucial March 31 deadline to submit product descriptions and prices for health plans it hopes to sell on the state's health insurance exchange. Because the state insurance commissioner must first approve those products, some of Blue Cross's products and/or prices might not be approved by March if it hasn't officially become a mutual company, reported The Detroit News.

If lawmakers don't promptly pass the legislation, "that puts Blue Cross at the huge disadvantage and it puts the insurance commissioner in a very difficult spot," Blue Cross spokesman Andrew Hetzel said, adding that completely transitioning into a mutual company will take about one year from when the bills are signed into law.

Michigan Insurance Commissioner Kevin Clinton agreed, noting that the rate approval process typically takes eight to nine months. "They're going to be under a time crunch unless they can come up with a way to have their rates approved faster than they've done in the past," he told the newspaper. "Certainly you want your state's largest insurer to be on the exchange."

The mutualization bills were reintroduced last week after Snyder vetoed similar legislation that contained a controversial provision that would have prohibited insurers from covering abortions, FierceHealthPayer previously reported.

Although they will likely  be quickly approved by the state Senate, it could take much longer in the House. "We have 26 new people so we can't do a quick thing like the Senate," Rep. Pete Lund told the Detroit News.

To learn more:
- read the Detroit News article