Here’s an interesting question: What do you call a charity that has a surplus of more than two billion dollars, pays its CEO a multi-million dollar salary, gets tax-exempt status, and thinks it is being treated unfairly? In Michigan, you call it Blue Cross/Blue Shield.
Many people don’t realize that the Blues are officially a charity. They were chartered by the Michigan Legislature in 1939 as, I quote, “a non-profit, tax-exempt, charitable and benevolent institution.”
Blue Cross was created “for the purpose of providing a mechanism for broad health care protection to the people of the state of Michigan.” What it was intended to be was the embryo of a universal health care plan, born during the waning days of the New Deal.
Today it is a rich and powerful enterprise, which has spent hundreds of millions buying up other companies in the past few years. But Blue Cross executives aren’t happy because they are losing money on policies for the self-insured.
Unlike private insurers, the Blues have to cover all Michigan residents, as long as they pay their premiums. They also have to ask for permission to raise their rates. Those who run the blues feel that isn’t fair, and they worry about the future.
Self-insured people are only about five percent of the market now. But that figure is projected to grow, especially with what is happening to the economy.
The Blues want it to be easier to raise their rates. They also want both private insurers and themselves to pay into a fund that they would administer, and which would be used to help cover the self-insured. If it sounds like the Blues want other companies to pay them to do the job the Blues were created to do, you heard correctly.
We called that chutzpah back home. Now, the Blues do have a point about the mushrooming cost of the self-insured.
They expect to lose $264 million on those customers next year. That can’t go on forever. But it seems to me that this ought to be part of a comprehensive discussion of health care costs in Michigan. We are facing a looming health care crisis in this state, especially as the auto industry continues to shed jobs.
Blue Cross wants its problem taken care of now, in the lame duck session. But it has another problem, one with its public image. Earlier this month, the Blues laid off more than 100 workers.
That’s a sad but common occurrence these days. What raised eyebrows was that at the same time, the Blues were spending $445,000 making political contributions to legislators.
Now they want instant legislative relief, at a time when few of us are paying attention and many lawmakers are on their way out, and have less reason to worry about what the voters think.
Rick Murdock works for the competition, a group of HMOs, but has a good point nevertheless. “This is the worst time to address any substantive legislation,” he said.
“We don’t know any reason why this can’t be addressed in the next session.” Frankly, neither do I.
Posted on November 12, 2008
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