Michigan Blues Legislation In Limbo

Last-minute insertions of anti-abortion language into a bill that would have overhauled the operations of Blue Cross Blue Shield of Michigan has led to a veto by Gov. Rick Snyder.

Snyder vetoed the bill, SB 1293, on Dec. 28, insisting that the insertion of language that would have exempted the insurer from covering abortions without additional premiums was too heavy-handed.

“The current bill goes too far in two ways. First, it treats situations that involve rape, incest and health of the mother as elective abortions,” Snyder said. “I don't believe it is appropriate to tell a woman who becomes pregnant due to a rape that she needed to select elective insurance coverage. Second, the abortion changes in this bill interfere in the current private marketplace for insurance. Insurance companies and private buyers of insurance should be able to conduct their own affairs."

At the same time, Snyder signed into law another bill that more tightly regulated the state's outpatient abortion providers, although many existing providers were grandfathered in under existing regulations.

“We are disappointed with the veto but understand the Governor’s decision,” said Andrew Hetzel, vice president of corporate communications for the Michigan Blues. “We also understand why he proposed the legislation in the first place.”

The Blues bill, which had bipartisan support, would have lifted its tax exemption for the state's largest insurer – translating to about $100 million in annual revenues – as it changed its status from a charitable organization to a mutual benefit insurance company. It would have also required the Michigan Blues to spend about $1.6 billion to endow a fund intended to improve the health of the state's residents. In exchange, the Blues would have been free of extra layers of regulatory scrutiny regarding premium rates other insurers in the state do not have to undergo.

Both Snyder and officials from the Michigan Blues are hopeful the bill can be introduced in the new session of the Legislature and not be changed by lameduck lawmakers, who apparently were behind the last-minute changes in the legislation.

“This legislation has the support of our industry competitors and major job providers. We encourage the Legislature to reintroduce and prioritize passage of these bills again, so our state has a modern system of regulation in place as early as possible (this) year,” Hetzel said.