As lawmakers debate a bill that could lessen Blue Cross Blue Shield of Michigan’s dominance in the health insurance marketplace, the American Medical Association released a study this week stating Michigan’s market is one of the least competitive in the U.S.
The bill would convert the Blue Cross Blue Shield into a nonprofit mutual insurer and require the company to pay taxes in hopes of encouraging competition among health care providers.
The bill currently is under discussion in the state House. According to the study, Detroit-based Blue Cross Blue Shield of Michigan dominates 69 percent of the state’s health insurance market.
In the 1980s, Blue Cross Blue Shield became a prominent company in Michigan’s health insurance market after it became the state’s non-profit insurer of last resort, meaning it provided insurance to Michigan residents despite pre-existing conditions.
But under the provisions of the Affordable Care Act, all health insurance companies will be required to provide coverage despite health status by January 2014.
Dean William Strampel of the College of Osteopathic Medicine said when one company controls a market, it discourages competition.
“If I owned 100 percent of all the apples in the U.S. … there wouldn’t be much competition,” he said. “I could charge you what I wanted for an apple (and you could) go without or have an apple from me.”
Lawmakers hope to make a decision on the bill before January 2013.