Reforming Michigan’s Insurance Code
For more than two years now, MAHP and its members and consultants have been working through a comprehensive review and update of Michigan’s Insurance code provisions that affect health insurance. This effort started internally following the enactment of the conversion of Blue Cross/Blue Shield to a mutual insurance company. Our overall objective was to keep Michigan laws strong and relevant to Michigan in context of federal law and recognize changes in the insurance marketplace both with respect to the types of health insurance plans that are sold and the types of entities offering coverage. The key recommendations include:
Provisions to allow health insurers the ability and greater flexibility to develop new products in response to market demands.
Modernizes the Insurance Code to embrace electronic means of communication.
Creates a clear definition of “health insurer” which includes HMOs except when otherwise specified. Avoids confusion between the differences of “insurer” and “HMO.”
Reduces regulatory requirements by streamlining the readability scoring process conducted by DIFS in certain cases where products are similar.
Deletes outdated requirements that are no longer relevant to today’s market.
Clarifies that several insurance mandates currently in law only apply to health insurance, and not to auto, life, or property and causality insurers.
Allows HMOs to provide Administrative Services Only (ASO) products through the HMO entity in order to better respond to recent market trends as more employers look to self-insure.
Revises the Code to conform to timeline in federal law (ERISA) for processing grievances. Simplifies compliance for consumers and insurers.
Updates the Patient’s Right to Independent Review Act to enable Michigan to maintain its own external review process, rather than defaulting to the federal one
The Legislature has now completed their work and has adopted the reform package. MAHP will be featuring the highlights of the changes at our Summer Conference as well as developing materials to assist members in working though the various changes. The issue of competition within the insurance market is more pronounced now than ever, and we are hopeful these changes will enable MAHP members to successfully compete in the marketplace and offer affordable coverage options to individuals, small groups, large groups, and governmental payers.
Conclusion
Starting the planning for the new Fiscal Year, we anticipated a fiscal “cliff” in state resources that would require us to take major steps to protect the eligibility, enrollment of consumers in Medicaid. Perhaps we have only “kicked the can” forward another year, but success with the repurposing of the use tax will go a long way toward sustaining a sound and viable Medicaid program. Likewise, adopting fundamental changes in Michigan’s insurance code should enable Michigan’s health plans to become more competitive and to respond quickly to market forces for innovation.
As I noted in a previous blog post, out of “crisis” comes opportunity and this is our opportunity to make a difference. Michigan taxpayers and our fellow citizens deserve nothing less.