December 19, 2008

    LANSING - Calling it a victory for struggling Michigan families, Attorney General Mike Cox today announced that anti-consumer legislation pushed by Blue Cross Blue Shield of Michigan to change the individual insurance market has failed to pass the Michigan legislature on the last day of its lame duck session.  The lack of legislative support marked the end of a wasteful two-year, multi-million dollar fight by the Blues to raise rates with no oversight. 
 

    "The winners today are Michigan's families, and this victory could not come at a better time," said Cox.  "Blue Cross' plan to allow automatic price increases of up to 75.4% has been defeated.   Michigan residents will continue to receive protection from my office and the governor when Blue Cross tries to raise their rates during this economic crisis."
 

     Blue Cross started its push for nearly unlimited authority to raise rates in 2007, when House Bills 5282 and 5283 quickly passed the House of Representatives by a wide margin.  As the public became aware of the severely anti-consumer content of the proposal, some legislators went as far as to publicly recant their votes for the bills.  Later, in the Senate, a compromise which would have better protected consumers was created by Sen. Tom George but was opposed by Blue Cross.  While many versions of the bills were floated at the Capitol, each one eliminated the oversight authority that the governor and attorney general currently can employ to challenge rate hikes and would have allowed rate hikes up to 75.4% on seniors and 37.7% on everyone else. 
 

    "Blue Cross took millions from hard-working families and instead of using it to provide access to care, it spent the money on lobbyists and PR firms in an attempt to convince the legislature to allow it to automatically raise rates," Cox said.  "It was a ruthless power grab unbefitting of a non-profit company to which tax payers give $100 million per year to ensure access to affordable care.  Thankfully, the public became aware of what was happening and helped put a stop to it."
 

        In fact, Michigan's leading consumer voices opposed the package, including:

• Major unions, like the UAW and AFSCME

• Consumer groups such as AARP and Consumers Union

• 14 editorial boards, including: the Detroit Free Press, Detroit News, Grand Rapids Press, Flint Journal, Lansing State Journal, Saginaw News, Oakland Press and Kalamazoo Gazette

    Despite his opposition to these proposals, Cox emphasized that he is ready and willing to look at other reforms which would help ensure the long-term financial viability of Blue Cross as Michigan's economic climate causes changes to the individual insurance market.  

    "While groups like the UAW and AARP joined me in opposing the current proposal, I believe we need to look more closely early next year at Blue Cross' books and use that information to make reasonable reforms which benefit everyone," Cox concluded.  "I sincerely hope that Blue Cross sees the error of its ways, stops wasting its customers' money on its PR machine and instead opens its books to a thorough examination.
 

    "By working together with my office, the legislature and the public, a compromise which gains the support of the entire state may be found."     

- 30 -