Allan Fawcett
Allan Fawcett is the director of market research and strategy at Priority Health. His laundry list of experience includes health care management consulting, market analysis, hospital operations, mergers and acquisitions, human resources and health insurance.
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Introduction:
May 2, 2008It's Derby time and ... they're off!Here we are in May, and as everyone knows the first Saturday in May is a very special day – Derby Day! A day for big hats, fast horses, mint juleps, and big bets. Looks like Senate Health Policy Committee has decided to hedge their bet and pass a mild set of reforms. After being approved by the committee, the bills (called the S-5 substitutes) were moved to the Senate floor and passed quickly by a nearly 2-to-1 margin. While not the most exciting two minutes in sports or public policy, there was a bit more buzz in Lansing than normal yesterday. All things considered, I am a fan of the new bills and think that they are good public policy and therefore good for businesses and tax payers in Michigan. In short, the bills:
The race is hardly over. In fact, it is probably in the clubhouse turn at best. The bills are headed to the House, where it is likely they will run into a strong headwind well-funded by the Blues who are less than happy with the current situation. The last time the Blues went to work in the House, they were able to pass the original bills in a couple of hours. Hopefully this time the House members will take a bit more time and heed the concerns of the Senate, the State Regulators, the Attorney General, the UAW, and numerous other consumer groups. Join the dialogue! Click here to submit your comment. Comments:
Comment: The Blues have always used the golden rule ... The one with the Gold makes the Rules. The typical Blue response has always been: "My way or the Highway." It's frustrating to see so much needed health care dollars wasted on fruitless gamesmanship all in the name of leveling the playing field.
April 24, 2008This Process has More Steps and Better Moves than Dance Dance Revolution!Have you ever sat back and watched your kids (or your nieces, neighbors kids, whatever.) play Dance Dance Revolution? It is tiring just watching – a lot like a Senate Hearing. After watching two days of hearings it is clear that Senator Clarke is singing the Blues – or at least using their roll of quarters to feed the jukebox. Despite testimony from numerous consumer groups regarding the downside of high risk pools and removal of consumer protection, the well funded S-3 bills (the substitutes written by an unknown party and submitted by Jason Allen) are likely to finally get the vote that Senator Clarke is pushing for. A vote is planned for next Wednesday, April 30th. In an admirable, but ultimately unsuccessful attempt to find a compromise, Senator George, the Committee Chair, asked each of major groups (Blue Cross, the commercial insurers, and the Michigan Association of Health Plans) if they could support a bill that included the 3 major provisions on which there actually was agreement. This would satisfy the need for immediate action from some of the Senators while avoiding putting laws on the books that no one fully understands. Senator George proposed a drafting a bill that would include:
As he questioned each of the parties, there was quick agreement from both the commercial insurers and the Association of Health Plans. Ah, the sweet illusion of progress. When the Blues had the chance to answer the question with a simple yes or no, Mr. Cook broke into a series of moves that the judges of Dancing with the Stars would be proud of. In true lobbyist form, he managed to dodge the simple "yes or no" question with a barrage of double talk and rhetoric. Not once, not twice, but four times! Ultimately, Senator George proved his point when the Blues dance became painfully obvious to those watching the hearing. The Blues ultimately took a stand that although compromise was possible (since the provisions under consideration all benefit them), it is simply not enough. Having spent millions of dollars in lobbying and advertising, the Blues won’t be satisfied with anything less than the full prize. Join the dialogue! Click here to submit your comment. April 18, 2008Things to do in April
Here is a brief summary of what happened ... Despite the agenda being focused on the Accident Fund portion of the bills, the health market reform jumped into the spotlight. Senator Allen (R-Traverse City) unveiled his substitute bills and there was an immediate motion from Senator Clarke (D-Detroit) that they be adopted. Hold the phone, no one other than the cabal that worked them had even seen them yet, wonder who paid the writers while everyone was on vacation? May be Senator Clarke spent his spring break in Traverse City. After the quick recess, the meeting got back on the track of Accident Fund and just what a bad idea it would be to allow the Blues the same market power in non-health markets they currently enjoy in the Michigan health insurance market. This discussion was really the first of any real debate on this part of the package, and it will be interesting to see how the Committee splits its time between the health insurance and other insurance portions of the bills. What are the top quotes from Lansing this week?
Join the dialogue! Click here to submit your comment. April 4, 2008Senate to act on Blue Bills? April Fool!OK, so I am few days late on the April Fool's joke, but there is no sense of urgency in Lansing other than the one being created by the Blues PAC. Looking ahead, there is not much expected until after the Spring Break. I wonder if the Senators are heading to Cancun with the rest of Michigan? There are a few dates to think about in the next month or so…
What appears to be missing from this is any mention of or contingency plan for the substitutes that are being developed by the Blues or other members of the Policy Committee. This should be an interesting month to watch once vacations wrap up. I thought I would also address a comment that came in this week as well. Comment:
Interestingly, BCBS does have one caveat to its guaranteed issue. They
will not give you coverage if your employer reimburses you for any part of the
health insurance premium. This effectively blocks small employers from using
HRA's to provide health insurance to their employees, as they do in many other
states. If you have an HRA for your employees, then the employees who cannot
get coverage on the open market due to pre-existing conditions also cannot get
covered by BCBS / BCN! How's that for "guaranteed"? Also - one quick
question: I thought that Blue Cross/Blue Shield and Blue Care Network were
the only guaranteed issue insurers. Do other HMO's serve that role as well?
With regards to guaranteed issue, the short answer is "yes," HMOs also serve as guaranteed issue options for Michigan residents. The long answer is a bit more complex. Blue Cross Blue Shield is unique in Michigan as the insurer of last resort. In exchange for this status, the Blues receive large financial benefits (tax breaks) to provide the safety net for insurance in the state. They cannot refuse to cover anyone – and thus are called a "guarantee issue." The guarantee issue requirement is not unique to BCBS since the HMOs also have this requirement and receive some favorable tax treatment. HMOs are required to renew policies in force (guaranteed renewal), offer conversion to individuals (converting COBRA into individual coverage) and offering a State-Mandated Individual Coverage (SMIC – where HMO group plans are open to individuals for a 30-day enrollment period). HMOs are thus also "guaranteed issue" organizations. Join the dialogue! Click here to submit your comment. March 28, 2008Hold the subs, it's time for a breakI am sure that some of you were awaiting the Senate Policy Hearing this week as eagerly as I was. I had just settled in with some snacks and a cold Diet Coke to watch the latest round of debate when our hearing was cancelled in favor of an appropriations vote on the Senate floor. No substitute bills to read, no political rhetoric to digest, and only repeated amendments on school funding to watch on SenateTV … boring!!! Now it looks like the bills and the subs will be catching some rays over the upcoming Spring Break – if only I was so lucky. By the time break is over, I am sure some of the subs will peek through the frozen ground. While legislators and school children are enjoying their break, the lobbyists and PR firms will probably be celebrating the "green" spring for a different set of reasons. Although the debate moves slower than a season of Lost, there are still some interesting developments to watch. Did you know …
Enjoy your break. In a few weeks, the media blitz will resume and then it's back to work for all of us! Join the dialogue! Click here to submit your comment. March 20, 2008Whether in Lansing or the first round of NCAA, it's time to send in the subs...Yesterday marked the latest activity in the state of reform in the individual insurance market in Michigan. After a bit of a break, Senator George released a batch of substitute bills as alternatives to the ones passed by the Blues. Check that, I mean passed by the Blues in the House. One thing was clear from the Senate Health Committee hearing - there has been a lot of activity taking place behind the scenes in Lansing. Does that surprise anyone? Senator George's bills were not received with open arms by many, if any, of his fellow committee members. There are clearly other substitute bills in various states of completion sitting in the offices of some of the committee members. Here is the 2-minute drill on Senator George's substitute bill:
While Senator George's bills have the Blues seeing red, I am sure that in a very short time, we will all be seeing a new set of Blue. Blue bills in the committee, Blue ads on the TV, and Blue lobbyists in the halls - when will it end? Probably never, we are just now starting to shine a light in Lansing and amazed at how much green it takes to have so many seeing Blue. Several of the committee members have agreed that we should get all the subs in the game - preferably before the Spring Break timeout. That sounds like a great plan, and coupled with more deliberation on the meaning and impact of the bills, we should eventually land in a good spot. I guess we are in for a new form of madness in March. BTW: Go State!!! Join the dialogue! Click here to submit your comment. March 14, 2008Ladies and Gentlemen, Start Your Engines!With warm weather almost upon us, (ok, I am being really optimistic here), it is time to start thinking about warm weather sports. Before we know it, golfers, tennis players, boaters, and yes, even legislators and lobbyists will be off to the races. Now if we could only do something about the potholes and gas prices, we all may be able to reach our vacation destinations with our tires and wallets intact! According to news sources in Lansing, we can expect the next round of battles on the Blue Bills to heat up very soon. After a thorough review by the Senate Health Policy Committee, it was apparent to our Senators that the Blue Bills had to get off the fast track and into the pits for a serious overhaul. We can expect to see the bills in a new form next week if the crew stays on schedule. Whether what comes out of the pits will be a completely new vehicle, or the same old chassis with just 4 new tires and fuel, remains to be seen. Once again, I am being optimistic, but I think that the Senate Committee has learned a lot about the market and the bills will be significantly different. After all, with the market deemed healthy by the regulators at OFIS and all the myths regarding the bills providing consumer protection "busted", we should expect something very different. One thing is for certain, once the bills are rolled onto the track, the lobbying and advertising engines will fire up louder than the roar at the first turn at Michigan International Speedway. This is a race that we cannot afford to watch from the sidelines. We have to keep informed and continue to let the folks in Lansing know where we stand. Don't ya just love a good race? Join the dialogue! Click here to submit your comment. March 6, 2008MythBusters: Consumer Protection from What Exactly???While watching the Senate Health Policy Committee in action again yesterday afternoon, I can finally begin to see the wheels of progress. During the testimony yesterday, the trade group for the insurance agents (“producers”) provided testimony on three issues at the request of Senator George. The Michigan Association of Health Underwriters spoke on three topics that are foundations of the IMR supporters' arguments that these bills are required to protect Michigan residents. Watching the testimony reminded me of watching MythBusters, special insurance-geek edition. Re-Underwriting The Myth: Insurance companies are singling out consumers who develop medical conditions once they have policies and unfairly raising their rates or dropping their coverage at renewal. This would be done by looking at a specific person’s history and re-evaluating (re-underwriting) their policy. What the Experts Said: Our insurance code (dating back to 1956) provides guaranteed renewability in the policies – so consumers are already protected by law from insurance companies dropping them for health reasons. Market practice in insurance is to evaluate rates by looking at a block of business (large group of policy holders) - not individual policy. The only company that used to evaluate specific individual medical history no longer does business in the state! 
Policy Rescission (cancellation) The Myth: Consumers can have their individual policies cancelled by insurance companies for inadvertent or inconsequential errors on complex forms. What the Experts Said: Cancellations happen in less than one-half of one percent of policies – that is about 5 in every 1,000 policies. More importantly, these are only due to:
Closing Blocks of Business The Myth: Insurance companies close up shop leaving residents with no insurance and no options. What the Experts Said: Like most businesses, insurance companies (but not the Blues or HMOs), have the ability to manage their business including halting specific products that are not performing or have poor designs (remember the Edsel?). This is could be done if a company decides to move out of type of business – for example, a company could stop providing health insurance to focus on auto insurance. It can also be done if new features are added to a product such as a new benefit or medical policy such as a requirement for 2nd opinions on surgical procedures. If this happens, consumers in Michigan have options. (Despite information Blue Bill supporters are splashing on the airwaves … while using up millions of dollars better spent on health care!) Consumers may be allowed free movement (no underwriting update) into the replacement product, they may shop for other plans that better fit their needs, or they may go to any of the guaranteed issue carriers such as the numerous HMOs in the state or Blue Cross Blue Shield. The presence of several guaranteed issue providers means that Michigan residents always have an option.
Join the dialogue! Click here to submit your comment. February 28, 2008At Least We are Off the Fast TrackAnother week has flown by and there has been very little public legislative activity on the Blue Bills. I have no doubt that there is a lot of "non-public" activity taking place on both sides of the issue. Local airwaves still carry the Blue's ads and newspapers are publishing articles and opinions for and against the bills daily. The battle lines are pretty clear - everyone receiving checks from the Blues on one side and everyone else on the other. I never thought I would think along these lines, but I am thankful that the Senate Health Policy Committee seems to be marching to its own beat. I guess this is because I have always viewed the legislative process as being dominated by special interests and huge PAC contributions. Call me naive, but after watching hours of testimony on the Blue Bills I have hope that the mistake made in the House will not repeat itself in the Senate, and that cash will not trump common sense. Insight from Lansing indicates another Senate hearing is in the works with another cast of characters will have an opportunity to make their voice heard in Lansing. Over the next few weeks, be on the lookout for...
Join the dialogue! Click here to submit your comment. February 21, 2008Crystal Ball or Magic 8 Ball?Happy Thursday! One of the readers posed a simple question - what does my crystal ball say regarding these bills? Unfortunately for me, my crystal ball is at the shop for a polishing and my back up is the tried and true Magic 8 Ball. Glancing into the source of all truth and knowledge reveals... "Reply hazy, try again." While the future of these bills is not set in stone, I have to think back to when this issue first started and what has happened in the meantime. As I reflect on the events thus far, my mind wanders to a lyric from Sgt. Pepper's , "I've got to admit its getting better, a little better all the time."
Join the dialogue! Click here to submit your comment. Comments:
Comment: These bills are the effort of BCBS to force individual policy seekers into the highest rate group they can generate. It allows BCBS to set up 100 different rates for individuals using geographic location and health condition. The thing that people should fear most is that they will be controlled by the State Insurance Commissioner and the Attorney General will more longer be able to use the power of the State to fight unjust policies and rates. They have already tried to price the meager choices they offer for Medigap coverage out of the reach of senior citizens. This was blocked by the Attorney General. As it is, they only offer 2 low end Medigap plans out of the twelve that the law defines. They are already using rate payers money for fancy furnishings and appointments in the building that was built with the rate payers money and also to advertise for the passage of these bad bills. They only use half truths in those ads. They are using rate money to buy private companies and want the State to allow them to buy more. Rate holder money should not be used for private ventures. That is what the stockholders and stock markets do! There is no protection if those ventures do not work out and the cash reserves of the company have to be depleted to make those investments. THEIR PAC'S HAVE PAID THOUSANDS OF DOLLARS, IN CAMPAIGN CONTRIBUTIONS TO THE STATE SENATORS AND REPRESENTATIVES THAT HAVE PASSED OR ARE CONSIDERING THIS BILL. I talked to my own representative about his vote for these bills in the house and it was very evident that he didn't have the slightest idea of what he was voting for. He was following the recommendation of his leadership and the house insurance committee (who I believe have members that introduced the bills). The representative from the state AARP told me the bills went through the house in 2 hours. Do we have representatives looking out for us or what? I believe that BCBS is trying to position themselves to become a public corporation in the future. In the meantime they have non-profit status and special legal protection from the laws that gave them that status. These bills are anti-consumer and benefit nobody but an effort to make BCBS a private corporation. The simple question is, how can they be the insurer of last resort went they seek the authority to price people out of the market? Google your own state representative and senator to check the campaign contribution they have received from BCBS and be very afraid.
February 14, 2008Update from Lansing!Yesterday may have been the last public hearing on the Blue Bills as they stand today. Testimony from actuarial and policy experts was the fare of the day and based on the limited coverage thus far, it is fair to say the testimony was fairly difficult to follow for most of us... The experts provided different opinions on lots of elements (as experts often do). One of the more interesting things that came was Deborah Chollet (a fellow at Mathematica Policy Research) testifying that the market would not grow at the rate that others think it may. If she is right, then I again have to wonder why we are rushing to enact a new set of laws? Mind the Gap If you have ever been to London, you will have heard the warning "Mind the Gap" before stepping on the tube. I think this warning should be placed on the ads for the Blue's Bills on market reform. The Guaranteed Access Plan (GAP) is probably one of the most glaring flaws with the bills as they are written today. Come to think of it, the way the bills are written is actually the most glaring flaw of all. The bills are incomplete and fail to define many of the details of what will actually happen if they are passed. Thankfully, the Senate Committee seems determined to produce a substitute bill. One thing is fairly clear: As written, the bills would establish a GAP that would kick in for those who have been denied coverage by other carriers. It could also kick in if you are defined as an "individual" according to the Blues definitions. This definition is flawed and includes people who have insurance through their employer (if their employer funds less than half of the premium) as well as those who are already insured by Medicare and have elected to purchase entirely voluntary supplemental coverage (Medigap). This definition is constructed solely to benefit the Blues and is entirely different from the definition used by the rest of the insurance business - including the Federal Government. The bills require the Blues to have four access plans, but there is no definition as to what the coverage will actually be, what it will cost, or what criteria will exist to people into the Blues-only GAP. Still, they are asking our legislators to make this law, with no idea if the GAP they are creating is a crack in the sidewalk or Snake River Canyon (for those Evel Knievel fans out there...) There are a couple of other issues to mind the Blues GAP...
Exactly whose best interests do the Blues have at heart? Join the dialogue! Click here to submit your comment. Comments:
Comment: Do you have a crystal ball? What's your prediction about the outcome of IMR?
Comment: I believe the GAP insurance coverage is Blue because other carriers have already denied them coverage. These are the sickest of the sick who gravitate to the Blues as the insurer of last resort. P.S. What's Priority's plan to help the uninsured. I'm sure you are working on that right now.
Comment: As an agent, I represent all insurers in Michigan, including BCBSM. I am appalled with BCBSM and our state legislators but not surprised by their ignorance. As Aristotle indicates, "A is A". Something is what it is or it is not. Either BCBSM is a public corporation, with tax-exempt status and insurer of last resort, or it is not. Just because BCBSM is administratively and financially ineffective does not mean all tax payers should pay for it. This current legislation effort is another attempt by BCBSM to load-off even more of their financial responsibilities. It appears Michigan has the best legislators money can buy paid for by BCBSM. They have not only successfully lead Michigan into a recession, of which the other states are not, but can't seem to learn from their own mistakes. Again, either BCBSM is a public corporation and insurer of last resort compensated with tax-free status or they are not. If they wish to allow BCBSM to shrug off their financial responsibilities, then make them a taxable entity and repeal their public corporation, tax-exempt status by a vote of the citizens of Michigan. Based upon the evidence of fiscal incompetence of our legislators, I have no confidence in their judgment to see through this latest round of BCBSM manipulation. I would suggest our legislators do a complete audit of BCBSM administrative and financial efficacy but then they would have to be able to identify it themselves, of which they can not. So, to the point at hand, BCBSM must be required to insure all individuals not covered by group coverage at community rating, as was their original requirement, with adequate benefit limits. Additionally, lets all remember our legislators' track record the next time we have the opportunity to vote.
February 7, 2008As the snow mounts, so does the sense of confusion in Lansing!The blustery weather across the state and an early closure of the Senate were not enough to stop the riveting testimony on Individual Market Reform. I know that most of you were also glued to your computers to watch the testimony on senateTV, but for those of you with real lives, I'll sum up some of the more interesting parts of the testimony... The hearing opened with three representatives from OFIS (Office Finance and Insurance Services) that regulate Blue Cross, HMOs, and other insurance carriers in the state. After the various Senators had a turn at Q&A, Attorney General Mike Cox provided a lengthy prepared set of remarks as well. This was also followed by a lot of Q&A. The hearing lasted more than an hour and a half and when combined with last week's event, the Senate has now spent more time than the House did contemplating these bills. Given the clear sense of confusion in the room, one can only speculate at what actually happened in the House, but one thing is sure - I have had dates that lasted longer than a House Committee hearing that could impact millions of Michiganders. The Senate appears to be taking some time to deliberate and I am thankful for it - these bills scare me. Several Senators seem to be fixated on the compensation of Blues Executives and their Board, which although interesting, but not part of the laws under consideration. Here are my Top 5 "A-Ha" moments from the hearing...
Join the dialogue! Click here to submit your comment. January 31, 2008Anyone else keeping score? I've got 1 to 0Based on how the hearing started, it would seem that perhaps my game comparison is more on target than I first thought. The hearing today started with Senator George having cards drawn for each of three groups presenting to see who gets to go first, roll the dice, and stake the first claim on the board. When the Blues' turn came up, they clearly landed on income tax, but more on that later... Senator Clarke drew the cards and even though his first words were "and the loser is..." (an ominous beginning) the order was Michigan Association of Health Plans (MAHP), Consumers for Fair and Affordable Insurance Reform (CFAIR aka Blue Cross), and the Coalition for Access and Affordability in Michigan (CAAM). Throughout the couple hours of testimony, it was clear what was on the Senators' minds. Chairman Senator Tom George (R-Texas Twp.) seemed focused on the hunt for a compromise that involved eliminating the practice of medical underwriting - or at least an explanation of why that would not work. He was also on the hunt for the authors of the bills to provide a clear reason why the reform was needed and what the risks were in the current model. He came up empty on all three counts. Vice Chairman Senator Hansen Clarke (D-Detroit) raised the big question that dominated much of the discussion after the elephant in the room was pointed out. His questions led to the discussion about these bills allowing the Blues to push their obligations as the insurer of last resort onto others and dilute their social mission. That raised the issue of whether or not, under these bills as written, the Blues can remain tax free. As the insurer of last resort, the Blues...
The best comments overheard in Lansing this week: "The purpose of insurance reform should be to ensure there is an insurer of last resort, not to ensure that the Blues are the last insurer on the resort!" - Anonymous "This issue was the most important they would deal with as legislators." - Senator John Gleason (D- Flushing) Comments:Comment: So how much of this bill is about the Blues needing to increase their reserves to cover their future retiree health benefits that they have promised to their workers? If this is the case, in the long run they may face the same issues as the automotive companies if they don't expand their monopoly. Why should every other carrier pay for their choices? Their employee benefits are much better than most had even in the hey day of employer paid benefits; and while they may pay a token amount for coverage their coverage is well beyond but what the average working person gets today.
Comment: With one stroke of the pen our legislators could completely level the playing field for all consumers and companies - just disallow any discrimination based on any pre-existing condition. The concept of insurance means we share risk and we benefit when we all stick together and help each other out. Providers who care about people and not just profits are at a disadvantage if their competitors are allowed to cherry pick the patients they will cover. A simple ban on cherry picking would level the playing field for all providers and make it competitive to not deny coverage.
Comment: We can argue all day about which is better: private providers or government providers. There is an easy market based way to find out! Just let me buy my way into Medicare coverage. Let me choose the bureaucracy that delivers my health care and then we will find out if not-for-profit or for-profit systems are better for us or not. Let the market decide.
AF: (02/06/2008) Great thoughts continue to come in on a number of topics related to these bills. There have also been some really interesting pieces in the media from both sides worth googling if you are interested. If you really want to see something worthwhile, you can check out the hearing today via SenateTV at 3:00 p.m. The Attorney General and the Insurance Commission are both providing testimony this afternoon that should be worth watching. This also gives you a chance to watch your senators in action first hand - knowing that the real action is behind closed doors, but this is as close as the voting average Joe may ever get... I really love the most recent comment from a reader about wanting to see more including types of coverage and cost. I could not agree more as did Senator Jacobs in last week's hearing. The problem is, the bills leave all of these items wide open and our legislators are signing bills without any way to really know what they are signing. The bills are relying on the "charitable and benevolence of the Blues" to win out in the plan designs and pricing - there is a lot less in the bills to protect consumers than we have today. That will be the essence of today's hearing, check it out, get involved, and use your voice! Comment: I would like to see more comments on what kind of coverage people would be getting, and how much it would cost each "individual"
Comment: This is in regards to the comment on eliminating cherry picking. There are some states that have done just that, there is no one insurance carrier of last resort and all non-group insurers by law have to pick up any and everyone. What this has done is chase most carriers out of these states and raised the average cost of non-group policies to double or more of what the average person here in Michigan can obtain quality health coverage for. Consequently, in these states, more people have become uninsured due to this bad legislation.
January 24, 2008Let the Games Begin!Yesterday afternoon in true newspaper fashion I hollered "Stop the Presses" on our update. This has been something I have always wanted to say and not something healthcare people get to say very often. I realized that although we planned to post a new piece on Wednesday, the first hearing in Lansing was taking place. Without a webcam option, I figured I would wait until today and comment on what happened in Lansing. Reminiscent of the current horse race in Washington, both sides had well prepared statements relating to how well the testimony went in support of their position. Only the Blues however, have stepped up to the plate with a massive advertising campaign on TV and radio around the state to support their position. And to think, if these bills pass, the administrative dollars associated with this type of decision making will find a way to come out of our pockets! Ouch! The first of several hearings were characterized by some great comments, observations, and one-liners from both sides of the issues. Here are some of my favorites... Of the nearly 100 people in the room, most were receiving payment from the Blues in some fashion. This includes...
My favorite comment can be attributed to Senator Jason Allen (R-Traverse City) who jumped into clarify the definition stating: "As a representative of Traverse City, I can say it's (cherry picking) a term to select the premium fruit." The current system of medical underwriting may not be perfect, but it has been in place for years and during this period the Blue reserves and executive salaries have skyrocketed to record levels. I am not buying the "poor Blue" argument one bit and neither are several experts. The Blues are the insurer of last resort. They receive millions in tax breaks for accepting this responsibility and the true cost to them is far less than the benefit they receive. About the Process: Senator George (R-Kalamazoo) did not establish a timeline for the bills and surprisingly enough, both sides believe this is in their best interest. For the Blues, they feel that expedited hearings and action in February appears to be in order. Thankfully, Senator George has expressed a desire for more hearings and a thorough understanding of what happens with this type of reform. This may mean a longer process that favors those opposed to the bills requiring longer periods of advertising and lobbying from the Blues and potentially tying the bills up in election hoopla. The last highlight-reel worthy comment comes from Senator Alan Sanborn (R-Richmond) said at today's hearing he was "pleased to see the deliberative nature" of the committee and obvious potshot at the House who took two hours on the bills and likely did not even understand what they signed. Comments:Comment: I think I'm beginning to understand why the Michigan state flag has a blue background. If I understand this correctly Blue Cross is not-for-profit. They have billions in the bank. They pay no taxes to the state. People in Michigan can't find affordable, comprehensive, individual health insurance, and the solution is to have Blue Cross bill all the other carriers for their costs. Does this include the agent commissions, their higher than necessary administrative costs, their advertising blitz's, pre-paid funding of hospitals and lucrative sponsorships of chambers throughout the state? It sounds like the state is about to do a sole vendor out-sourcing of individual health care in Michigan. Is Halliburton a wholly owned subsidiary of Blue Cross? Who hasn't been bought and paid for in this scheme? I understand the bills cleared the house in record time.
Comment: So those of use who are insured through our employer or through our choice and proper planning could subsidize the poor business practices of a multi-billion dollor company, BCBSM? Don't we tax payers already subsidize a payor of last resort, Medicaid? At least with Mediciad the clients have been vetted for need and finances and although it it government, there are some safe guards on the $. Who would assure that with BCBS?
Comment: Last night on TV I saw an ad by the Blues putting forth their version of what these bills are trying to accomplish. I was speechless. Their regular commercials that say something about "never turning anyone away because of a health condition" always leave me spluttering, too. They always seem to gloss over the part that they HAVE to and that it is very much to their profit. Now they are leaving out the part that if they get their way, they'll be able to make you wait twice as long, and charge you up to four times as much for coverage. I also came across a press release by CFAIR, where Rob Fowler, president and CEO of the Small Business Association of Michigan endorses the bills. He can't possibly realize what they will mean for small business owners with their new definition of "individual."
Comment: I'm an average person who is self employed and has a family, so individual health care coverage is very important to me. I can understand that the Blues need to make "ends meet" with their individual products just like any other insurer, so I'm not against them being able to base rates to a certain extent based off of a person's health. I also understand that they receive a hefty amount of tax advantages that should help offset losses due to being the carrier of last resort. With that being said, I could see if the Blues were loosing money and were loosing ground in the market place, then maybe some of their tears would mean something in this debate, as it is, I don't see them hurting for business.
Comment: As an agent and someone who is very interested in this debate, I am very concerned with people being able to be covered, not just because it is my business, but also because there is a problem out there when it comes to affordable health coverage. I love free enterprise! In most cases it creates a system of checks and balances that benefits the consumer. One of the biggest problems that I see with these bills is that it really makes the playing field more lopsided than it already is. I believe the consumer would be served best if they have options, not just from the Blues, but also from other insurers. While there are definitely merits to these bills, I believe they would give the Blues more of an advantage than they already have.
Comment: Michigan Blues have the best legislature money can buy. Given that, the Senate's willingness and ability to evaluate these bills fairly and realistically is the question. All that money spread around doesn't buy votes. It certainly however buys access. A major contributor requesting consideration of an issue is provided the opportunity to make that pitch. They get serious face time. The other side, i.e. in this case those looking out for the best interests of Michigan residents rather than Mother Blue, are disadvantaged at the starting gate. This is the public policy conundrum inherent within these bills. They might be considered reasonable and prudent health policy upon first look, as "spun" by proponents with the messaging opportunity within and behind closed doors. Pry up the floorboards, though, and behold the minefield beneath. What Lies Beneath is a fright. It helps to stay upbeat. David took down Goliath once. It could happen again. The countering message must get through. Mother Blue doesn't always know best.
January 16, 2008The State of Michigan has plenty of issues to deal with including our "one state recession" and the Democratic National Convention turning its backs on our delegates. Health care and health insurance seem to be on everyone's lips, including the Democrats who are not on our Primary Ballot and the Republicans who are. Issues surrounding our health care are being piled on by special interests, insurance companies, and not-for-profit health care companies. Everyone has a stake in what happens next.When it comes to health care in Michigan, you can't pick up a paper or click on a website without seeing terms like "market reform," VEBAs, uninsured, "universal coverage," "market-based solutions," "Blue Bills," retiree coverage, consumerism, and countless others. Almost too much to keep track of, and the basic question is, "Why should you care?" Well, if you believe ignorance is bliss (not to mention your constitutional right), click the back button and keep Googling to find the latest update on the Britney custody battle or to check on whether Lindsay has had another relapse. If you have interest in having health insurance coverage - and as a new father I certainly do - together we can begin to understand why health insurance is such a hot topic this election year and why you should care about it. Before we go too far, here are few facts about insurance coverage:
Do Not Pass Go, Do Not Collect $200... With the boom in MP3s, text messaging, and Xbox games, there are not that many of our kids that have ever sat down with the family to play Monopoly. Personally I love the game and hope to teach it to my son someday. It is great to know that no matter how disastrous of a deal I make, at the end of the game the funny money goes back in the box. Blue Cross Blue Shield is a monopoly pure and simple. Their market share in the State is enormous (they have about 3/4th of the board). They use this power in Lansing to influence legislators and across the state to demand payment rates from hospitals so low that few hospitals could survive solely on the rates they receive from the Blues. No hospital or physician can stand up to them when it is time to negotiate. Recently, Blue Cross Blue Shield introduced a series of bills (nicknamed the Blue Bills) to "reform the individual market," the last set of properties on the board that the Blues don't already own. Can any of us really afford to let the monopoly rewrite the rules of the game for the rest of us in Michigan? What is taking place in Lansing on these bills is no game, and when it's over, the money - real money and more than we spend today, will come out of each of our wallets... do not pass go, do not collect $200... Comments:AF: (01/17/2008) The first official day for this blog is over and there have been lots of visitors and contributors. Glad to hear that my Mom likes the sweater and that she is still worried about me being too thick around the middle... I thought I would share a few of the comments thus far and respond just a bit. We will do a more thorough update next Wednesday 01/22/2008, but here is what people are saying so far.Comment: Can you tell me more about what the "blue bill" is all about?
Comment: What I find amazing on Individual Market Reform is that really no one, other than the authors (Blue Cross Blue Shield of Michigan) supports the bills. The AARP, MAHP, UAW, Consumers Union, the Attorney General, the Senate Chair of the Health Policy Committee have either opposed or expressed major concerns. Even many of the local Chambers of Commerce and independent agents, who get much of their funding from BCBS, are embracing neutrality as their stance. Hopefully the Senate will realize that passing Individual Market Reform would be bad for Michigan.
Comment: I love dialogue about a problem, so I applaud you. What are the Blues trying to accomplish with these bills? How would it have an ill effect on competition from other insurers such as Priority? About all I have heard is that currently the Blues finance part of their individual business with their group business and that these bills would change that. Also, they are asking to change their pre-existing time frame. Can you shed some light?
Comment: Great introductory commentary - but, where's the meat? Your blog began to peak my interest... but you've left without any way to buy all the railroads. Why should we believe you, and if I do, what can I do? And, dibs on the car...
AF: Without going into too much detail, let me address what a "Blue Bill" is. Would you believe that Blue Bills are: a species of duck also known as a scaup, or a series of laws proposed by Blue Cross Blue Shield of Michigan (House Bill 5282 and House Bill 5283). While I enjoy duck, especially with orange sauce, we are here to chat about the proposed legislation. The bills are complex and we will spend some time breaking them down in the next few posts, but in a nutshell, they:
Comment: A carjacker says "your car or your life". A mugger says "your money or your life". A dentist says "your money or your teeth". Medical providers say "your money or your life/health". Someone needs to put the brakes on this kind of medical extortion. The country is becoming bankrupt in large part due to the cost of medical care. But a lone consumer has no chance when it comes to getting medical care. So we need someone to negotiate for us. That is why I propose that the federal government negotiate national/regional fee schedules that all insurance companies would use. But that's all I would ask the federal government to do. In fact, I would get the government totally out of the business of medical care. Instead of VA hospitals the governemt should contract with private hospitals. Medicare should get out of the claims paying business and turn this over to private insurance companies who check credentials and monitor care. We also need to take a look at the supply of doctors so we make sure we have enough. And we can't award multimillion dollar settlements for medical malpractice. We simply revoke the medical license and put the doctor in jail. If the hospital is negligent then shut down the hospital and / or jail the people responsible and bar them from medical care. We also need to admit that we shouldn't be compelled to fix everything. So an insurance company can offer an "Oregon plan" at considerably reduced premiums. This would give consumers a real choice. If others want everything covered then they can pay for a delux plan that would do everything medically possible. Thanks for listening.
Comment: I am very grateful that I have health insurance. Something needs to be done for the 1 million people in Michigan who don't. So what is the solution? Are there any parts of the bills that you agree with? For example rate bands, limits on rate increases and loss ratios?
AF: (01/22/08) Someone earlier paraphrased the immortal words of Clara Peller, asking "where's the beef?" Now there are a couple of ways one can interpret what "beef" is, so I will organize my thoughts accordingly...
We will try to iron out the Guaranteed Access Pool (GAP) on Wednesday. In the meantime, if you want to make your voice heard in Lansing, it is easy to send them an email. Comment: : I agree with the comment "But a lone consumer has no chance when it comes to getting medical care. So we need someone to negotiate for us" from the previous author. I would like to remind organizations that hospitals pay money to MHA to represent them in these situations... instead it is apparent that MHA and BCBSM work together to promote the interests of BCBSM. It is time for hospital organizations to pay attention to this activity and get "their" representative group back on track. I would suggest that MHA poll their membership regarding the proposed bills and represent the interests of hospitals and therefore the patients they serve.
AF: A couple of great thoughts out there which are really worth the time to read - thank you very much for taking the time to share your thoughts. For those of us non-health industry people out there, I believe the MHA that is being referenced is the Michigan Health & Hospital Association. I could not agree more that hearing from the hospitals on this issue would be fantastic. If they oppose the bills, which I believe they would, is anyone surprised they have remained silent? Do we honestly believe they will anger the 800 pound gorilla that controls their market share and their cash flow? With as much monopoly power at work as we have in Michigan, it is an unfortunate, but not unexpected, position of silence that our hospitals are forced into. There is another great post on Crain’s Detroit today that is also worth a click... Join the dialogue! Click here to submit your comment.
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05/09/08
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