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Michigan Senate panel approves Blue Cross bills

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LANSING, Mich. (AP) — The Michigan state Senate is poised to consider an overhaul of Blue Cross Blue Shield of Michigan.

The Senate Insurance Committee passed two overhaul-related bills Tuesday and sent them to the full chamber for a vote Wednesday. The bills received bipartisan support.

AARP opposes the bills in their present form, saying they should address issues of health care affordability and access.

Michigan Blue has served as an “insurer of last resort” in Michigan. The company has a tax exemption and gets special regulatory treatment because it agrees to provide health coverage for residents with pre-existing conditions.

Lawmakers have argued that the state should change the way it treats Michigan Blue because, starting in 2014, the Patient Protection and Affordable Care Act (PPACA) is supposed to prohibit any health insurer from taking health status into account when deciding whether to issue coverage or how to price coverage.

The Michigan Blue overhaul legislation would end the company’s tax-exempt status and change the health insurer from a charitable trust to a customer-owned nonprofit.

To compensate the public for the transfer of assets to the plan customers, from the public, Michigan Blue would contribute about $1.5 billion over 18 years to a foundation. The foundation would support efforts to improve public health and health care access.

Allison Bell added information to this report.

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