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2007 House Bill 5282: Revise individual health insurance policy regulations (House Roll Call 487)
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Passed 89 to 17 in the House on October 24, 2007.
View All of House Bill 5282: History, Amendments & Comments 

The vote was 89 in favor, 17 against, and 4 not voting.
(House Roll Call 487 at House Journal 112)

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Against Against
Not Voting Not Voting
58 total votes
52 total votes

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Revise individual health insurance policy regulations



Accavitti (D)Angerer (D)Bauer (D)Bennett (D)Bieda (D)
Brown (D)Byrnes (D)Byrum (D)Clack (D)Clemente (D)
Condino (D)Constan (D)Corriveau (D)Coulouris (D)Dean (D)
Dillon (D)Donigan (D)Ebli (D)Espinoza (D)Farrah (D)
Gillard (D)Gonzales (D)Griffin (D)Hammel (D)Hammon (D)
Hood (D)Hopgood (D)Jackson (D)Johnson (D)Jones, Robert (D)
Law, Kathleen (D)LeBlanc (D)Leland (D)Lemmons (D)Lindberg (D)
Mayes (D)McDowell (D)Meadows (D)Meisner (D)Melton (D)
Miller (D)Polidori (D)Sak (D)Scott (D)Sheltrown (D)
Simpson (D)Smith, Virgil (D)Spade (D)Tobocman (D)Vagnozzi (D)
Valentine (D)Warren (D)Wojno (D)Young (D) 


Acciavatti (R)Amos (R)Ball (R)Booher (R)Brandenburg (R)
Casperson (R)Caswell (R)Caul (R)Elsenheimer (R)Gaffney (R)
Green (R)Hansen (R)Hildenbrand (R)Huizenga (R)Hune (R)
Jones, Rick (R)LaJoy (R)Law, David (R)Marleau (R)Moolenaar (R)
Moore (R)Moss (R)Nitz (R)Nofs (R)Opsommer (R)
Palsrok (R)Pastor (R)Pavlov (R)Proos (R)Robertson (R)
Rocca (R)Shaffer (R)Steil (R)Ward (R)Wenke (R)



Lahti (D)Smith, Alma (D)


Agema (R)Calley (R)Emmons (R)Garfield (R)Hoogendyk (R)
Horn (R)Meekhof (R)Meltzer (R)Palmer (R)Pearce (R)
Schuitmaker (R)Sheen (R)Stahl (R)Stakoe (R)Walker (R)


Cheeks (D)Cushingberry (D)DeRoche (R)Knollenberg (R)


Y    Accavitti (D)Y    Acciavatti (R)  n  Agema (R)Y    Amos (R)Y    Angerer (D)
Y    Ball (R)Y    Bauer (D)Y    Bennett (D)Y    Bieda (D)Y    Booher (R)
Y    Brandenburg (R)Y    Brown (D)Y    Byrnes (D)Y    Byrum (D)  n  Calley (R)
Y    Casperson (R)Y    Caswell (R)Y    Caul (R)  -  Cheeks (D)Y    Clack (D)
Y    Clemente (D)Y    Condino (D)Y    Constan (D)Y    Corriveau (D)Y    Coulouris (D)
  -  Cushingberry (D)Y    Dean (D)  -  DeRoche (R)Y    Dillon (D)Y    Donigan (D)
Y    Ebli (D)Y    Elsenheimer (R)  n  Emmons (R)Y    Espinoza (D)Y    Farrah (D)
Y    Gaffney (R)  n  Garfield (R)Y    Gillard (D)Y    Gonzales (D)Y    Green (R)
Y    Griffin (D)Y    Hammel (D)Y    Hammon (D)Y    Hansen (R)Y    Hildenbrand (R)
Y    Hood (D)  n  Hoogendyk (R)Y    Hopgood (D)  n  Horn (R)Y    Huizenga (R)
Y    Hune (R)Y    Jackson (D)Y    Johnson (D)Y    Jones, Rick (R)Y    Jones, Robert (D)
  -  Knollenberg (R)  n  Lahti (D)Y    LaJoy (R)Y    Law, David (R)Y    Law, Kathleen (D)
Y    LeBlanc (D)Y    Leland (D)Y    Lemmons (D)Y    Lindberg (D)Y    Marleau (R)
Y    Mayes (D)Y    McDowell (D)Y    Meadows (D)  n  Meekhof (R)Y    Meisner (D)
Y    Melton (D)  n  Meltzer (R)Y    Miller (D)Y    Moolenaar (R)Y    Moore (R)
Y    Moss (R)Y    Nitz (R)Y    Nofs (R)Y    Opsommer (R)  n  Palmer (R)
Y    Palsrok (R)Y    Pastor (R)Y    Pavlov (R)  n  Pearce (R)Y    Polidori (D)
Y    Proos (R)Y    Robertson (R)Y    Rocca (R)Y    Sak (D)  n  Schuitmaker (R)
Y    Scott (D)Y    Shaffer (R)  n  Sheen (R)Y    Sheltrown (D)Y    Simpson (D)
  n  Smith, Alma (D)Y    Smith, Virgil (D)Y    Spade (D)  n  Stahl (R)  n  Stakoe (R)
Y    Steil (R)Y    Tobocman (D)Y    Vagnozzi (D)Y    Valentine (D)  n  Walker (R)
Y    Ward (R)Y    Warren (D)Y    Wenke (R)Y    Wojno (D)Y    Young (D)

House Roll Call 487 on 2007 House Bill 5282



How About  by Anonymous Citizen on February 28, 2008 
We get the governments perpetual anchor out of business all together???

New Tax Anyone?  by Anonymous Citizen on February 27, 2008 
There are plenty of bad things about this legislation. As our Attorney General stated in his testimony on these bills, "The current package is deeply flawed."

If these bills are passed, it will lead to a less competitive Michigan. Many agree including: the Michigan Chamber of Commerce, the UAW, AARP, Consumers Union and many others. Some organizations, all of which have financial ties to BCBSM, support the package.

In order to clarify how these bills will hurt business, we offer the following:

(1) HB 5282 includes a NEW TAX! And it's the worst kind of tax. A tax on individuals, people who can't get coverage through their employer, that are trying to become insured. HB 5282 as passed by the House, and being debated in the Senate, includes the following:


The "assessment" is a new tax. The tax is anticompetitive as the proceeds of the new tax go to a state-protected monopoly.
We need to remind legislators that this legislation includes a new tax that may discourage people from becoming insured. Governor Granholm has pledged "no fees or taxes" during the State of the State Address. More recently she has been quoted. "I am not ever going to raise taxes again". C’mon legislature, wake up, read the bills, and do not just pass something because you see an ad on TV.
(2) The amount of the new tax could be huge and lead to higher premiums for all. Dan Loepp mentioned in the Detroit News that BCBSM will lose $150 million on individual insurance this year. This total uses a very broad and misleading definition of individual. It includes the following breakdown with estimated losses:

Non-Group (true individual coverage): $7 Million
Group Conversion: $26 Million
Medigap Insurance: $ 117 Million

As you can see from the listing above, the overwhelming amount of the losses come from Medigap (which is a supplement over and above Medicare in a market that BCBSM has a greater than 70% market share) and Group Conversion (which is a requirement to do group business in Michigan for all carriers and most lose a greater % of revenue than BCBSM on their Group Conversion business).

One might assume that $150 Million would be the amount of the new tax that will be assessed on BCBSM competitors. But it could be much larger. Insurance companies traditionally make money on the majority of their individuals, and use that money to pay for the individuals that have high claims. This is true for virtually all insurance coverage. This legislation would allow BCBSM to keep the healthy people and move the unhealthy people to a pool funded by their competitors. So if the BCBSM loss is $150 Million with the low risk and high risk individuals in their current pool, they would likely be losing $300 to $500 million if we were to look at the high risk people only. And of course this amount would grow each subsequent year.

If a competitor of BCBSM has a small 5% market share in the individual market, they could be taxed $15 to $25 million by the State in order to pad the profits of a very profitable competitor. This amount is so large, that the competitor would be required to fund this tax by raising premiums on its other products including group insurance. These laws will lead to higher costs for all in Michigan.

Thank you for the opportunity to provide feedback.

"Combat Journalist" Jeff Emmanuel launches assault on sellout to BCBS  by Anonymous Citizen on January 17, 2008 
Michigan government’s attempt to micromanage health insurance market will hurt quality and limit consumer choice.

January 6, 2008


In late 2007, after a single perfunctory committee meeting, the Michigan House of Representatives passed a series of four bills which, if approved by the Senate and signed into law by Gov. Jennifer Granholm, will have a very negative effect on the health insurance market in the state.

House Bills (HBs) 5282 through 5285 regulate in insurance market in several ways, including by implementing mandates on how private insurance companies allocate the money they earn in policyholder premiums. Should these bills be passed, private health insurance carriers will be required by law to spend no less than 70% of premium income on health benefits. If a smaller percentage is used to fund health care for policyholders, state law would require carriers to issue refunds to their customers of such an amount as t o reduce the amount of capital use on anything other than health care to 30% of premium income or less.

This law would effectively cap insurance company profits, limiting them to whatever percentage of the 30% of income not spent on health benefits remained after all other operating and administrative costs were covered. Passing a series of bills regulating how much of their earnings insurance providers are allowed to keep and how much must be dedicated to certain expenditures will have a noticeably negative effect on the health insurance market since, as with any industry, capping profits stifles innovation and significantly reduces quality of service, as the main impetus for improvement is removed.

The effect of these bills on the health insurance market would not be limited to the negative results of mandated interference in private companies’ financial decisions. In fact, HBs 5282-5 would virtually eliminate the health insurance market in Michigan altogether by naming one single carrier the de facto official health insurance company of the entire state.

Health care giant Blue Cross Blue Shield (BCBS) has long enjoyed tax-exempt status in Michigan, as the result of a 1938 deal BCBS made with the state to be the “insurer of last resort” for otherwise uninsurable consumers. This means, for tax purposes, that the carrier was treated as a non-profit corporation, while actually operating as a for-profit business.

In the time since that deal was struck, BCBS’s operation has continuously expanded, and it now owns nearly 70% of the state health insurance market (for comparison’s sake, the largest market share owned by any carrier in any other state in the country is currently 38%).

There is little fault to be found in a company accepting benefits in exchange for filling a necessary gap in the health insurance market. In this case, that benefit is the eligibility to claim nonprofit tax status while actually being a for-profit company. However, HBs 5282-5 would sweeten BCBS’s deal considerably, not only by “repeal[ing] limitations on for-profit subsidiaries of Blue Cross Blue Shield (the Accident Fund insurance company) selling auto, disability, workers compensation and other types of insurance,” but by adding to BCBS’s financial benefits at the expense of the rest of Michigan’s private carriers.

If these bills pass, all private insurers in the state will be forced, according to the language in HB 5282, to “assume full liability for all excess losses and commissions in the guaranteed-access health benefit plans.” What this means is that every private insurer in the state of Michigan will be held financially liable for losses suffered by BCBS due to its guaranteed-access health benefit coverage, and will be forced to pay a “proportional share” of the total amount necessary to “offset” BCBS’s losses.

What this means is that Blue Cross Blue Shield of Michigan, which recorded $210 million in net earnings in 2006, and $337 million the year before that, would have its profits boosted even further by the government’s forcible redistribution of capital from BCBS’s much smaller insurance-providing counterparts in the state.

According to HB 5852, the “proportional share” that each carrier is responsible for paying BCBS would be “based on each carrier’s share of covered lives in the individual market.” In other words, the more successful a carrier is at providing health coverage to individual Michiganders, the more capital will be taken from it and given to Blue Cross Blue Shield by the state government.

Combined with regulating profit and insurance provider spending, mandating the forcible confiscation of money from carriers in the state to “offset” BCBS’s losses, based proportionally on the size of those carriers’ clienteles, will discourage private companies from attempting to expand their respective market shares. In other words, besides stifling innovation and removing incentive for quality improvement, these bills would punish insurance providers for the portion of the market they occupy, and would do a great deal to discourage active recruitment of new policyholders.

This combination of regulations and mandates would effectively leave only one place to go for Michiganders seeking health coverage: Blue Cross Blue Shield. Any incentive for other carriers to innovate, improve quality, or acquire new policyholders would be eradicated, leaving BCBS as the only carrier in the state with incentive to expand its market share.

Michigan HBs 5282-5285 meddle in the health care market by regulating the financial decisions of private businesses and by rewarding a single health insurance provider at the expense of the rest of the carriers in the state. The result of these bills, which serve to artificially narrow the market, will be to decrease the quality of health insurance and to drastically limit consumer choice.

If the goal of Michigan’s government is really to reform health care, and not simply to play favorites in the insurance market, then its members should seek to encourage more innovation and competition, instead of penalizing private insurance carriers for actively seeking to insure more people.

Jeff Emanuel is research fellow for health care policy at The Heartland Institute, a free-market public policy organization, and is managing editor of Health Care News.

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