Monday, October 17, 2011

Michigan "Blues" Conversion Sparks Controversy

A legislative effort to convert Blue Cross Blue Shield of Michigan, a nonprofit organization that controls 70% of Michigan's insurance market, into a for-profit insurance company is encountering strong opposition from the chair of the state's Senate Insurance Committee.  The Detroit News reports that the 31-year-old statute granting the Blues' nonprofit status is up for review, which prompted the Governor to call for a "fresh look" and consideration of a for-profit conversion that could arguably stimulate competition, decrease rates, and improve overall access to health care.  The company is opposed to the proposed conversion, arguing that "[a] nonprofit, community-governed Blue Cross allows the company to do more to improve health care quality and security for all the people of Michigan, rather than operate as a profit generator for stockholder owners."

This Michigan development is not a new nor unique one, as Blues have been converted in other states.  As aptly raised by The Nonprofit Quarterly in its related article, a for-profit conversion customarily results in the creation of a charitable foundation - does this adequately account for the loss of charitable assets that results from such a conversion?  Will there be any tangible effect from the Blues operating as a for-profit insurer, especially in light of the Affordable Care Act?

NAM

http://lawprofessors.typepad.com/nonprofit/2011/10/michigan-blues-conversion-sparks-controversy.html

In the News, State – Executive, State – Legislative | Permalink

TrackBack URL for this entry:

http://www.typepad.com/services/trackback/6a00d8341bfae553ef014e8c531bed970d

Listed below are links to weblogs that reference Michigan "Blues" Conversion Sparks Controversy:

Comments

Post a comment