After six months, the Michigan Senate passed a set of bills that are weaker than the legislation passed by the House. These bills contain some reforms we supported, including:
Lowering the waiting period for pre-existing conditions to six months.
Prohibiting insurance companies from raising rates at renewal because of a person’s medical condition.
Authorizing the Insurance Commissioner to order refunds for excessive rates.
There is more to be done to finish the job of insurance reform; the Senate bills do not provide the comprehensive consumer protections proposed by the House. We need legislation that:
Caps rates and rate increases.
Creates a uniform, objective method for setting rates.
Establishes a Guaranteed Access Plan for high-risk individuals.
The insurance market reform bills will now go back to Michigan House of Representatives, and we are hopeful they will add these needed consumer protections.
Michigan deserves more consumer protection Here is a brief overview to help you understand the elements still missing in the Senate bills and why they are needed to improve health care in Michigan.
Capping rates, limiting rate increases
Michigan needs protection against high rates. Under the current rules, for-profit insurers have virtually no limit on how much they charge when people apply for coverage. They can charge whatever they want. Reform legislation will create fair, consistent pricing by putting a cap on the amount an insurer can charge when people apply for coverage.
Guaranteed Access Plan (GAP)
The substitute bills do not ensure coverage through a Guaranteed-Access Plan For-profit insurers can deny coverage for any reason and typically, they turn away 20 percent to 30 percent of those who apply. Because there are no limits on how much they can raise rates at the time of renewal, they can price people right out of coverage, leaving them unprotected when they need coverage the most.
The reform bills provide no safety net for Michigan residents who need insurance the most. In 35 other states, insurance companies all contribute to a high-risk pool. In Michigan, Blue Cross Blue Shield alone serves as the insurer of last resort, providing health care coverage for a population whose health care utilization needs is more frequent and more costly. A Guaranteed Access Plan is needed to ensure long term affordability and access to health care.
Contact your legislators and let them know more work is needed on the individual market reform bills!
