Things in Michigan seem to keep getting worse. The state economy is mightily struggling, leading to major cutbacks all across the board — affecting just about everyone from steel workers to school teachers.
And health insurance rates keep going up, too.
Daniel J. Loepp, president and CEO of Blue Cross Blue Shield of Michigan, recently sent a letter to The Detroit News offering interesting insight to the current premium increases in the state.
Loepp argues that Blue Cross Blue Shield of Michigan is a nonprofit insurance company that cannot reject anyone in the state for having a pre-existing condition. The state’s largest health insurer also cannot charge premiums based on age, gender or health status-meaning every consumer pays the same premium.
In addition, the Michigan Insurance Commissioner regulates Blue Cross Blue Shield of Michigan’s rates. Their finances are transparent for anyone to view because they self-limit their margins. Finally, Blue Cross has only earned one-tenth of 1 percent margin for the last 20 years.
In addition to all of this, Blue Cross Blue Shield of Michigan promotes access to health care by donating $15 million annually for the Michigan’s Child program that provides health care services to children in low-income families.
Still, Blue Cross Blue Shield of Michigan is under heavy fire for raising premiums.
Loepp says because BCBS of Michigan is an “insurer-of-last-resort, ” they get an insurance pool of sicker and older consumers while deterring young and healthy individuals.
Michigan has also faced record levels of high unemployment which has shifted many people from employer-based coverage to the individual market. And those who cannot get coverage anywhere else turn to Blue Cross Blue Shield of Michigan.
So, that’s why the BCBS of Michigan chief favors health reform and an individual mandate requiring everyone to obtain health insurance.