Updates About Health Insurance

Michigan Medicine and Blue Cross Blue Shield of Michigan (BCBSM) have finally reached an agreement after months of negotiations. Their current deal was set to expire on June 30, removing roughly 300,000 Michiganders from coverage at the health system. The two sides said they will continue working to finalize the details of the new five-year contract as the expiration date approaches.

Blue Cross Blue Shield of Michigan said rising health care costs and affordability concerns drove its position in negotiations with Michigan Medicine. The insurer argued it already reimburses Michigan Medicine at the highest rates in the state and could not agree to higher payments amid increasing medical and prescription drug costs.

Michigan Medicine, however, claimed it has been undercompensated for providing highly specialized and complex care, as well as for its research and innovation role. They also argued that its reimbursement rates from BCBSM are significantly lower than comparable Big Ten academic medical centers.

This comes after Michigan Medicine had already notified patients that BCBSM may no longer be accepted for services they provide, leading many patients to switch providers or delay services until the conflict has been resolved. Patients insured under BCBSM who remained with their Michigan Medicine care teams will no longer be faced to make such decisions.

The Senate Finance, Insurance and Consumer Protection Committee recently took up testimony on SB 914, introduced by Stephanie Chang (D-Detroit). The bill would require prescription drug co-pay assistance to count toward a patient’s deductible and out-of-pocket maximum.

Supporters of the bill include patient advocacy groups that represent individuals with serious conditions such as cancer, blood disorders, epilepsy, and other diseases that require patients to rely on costly medications. Supporting organizations argue that the bill would reduce unexpected out-of-pocket costs for patients, while simultaneously improving affordability and transparency in drug pricing.

Opposition comes primarily from insurers and health plans, who argue the policy would influence patients to purchase more expensive brand name medications versus cheaper generic options. It has also been suggested that co-pay coupons increase the cost of brand name medications over time.

The bill is now waiting on a Committee vote.

Senate Democrats plan to reintroduce legislation to establish a state-based health insurance exchange in Michigan and create a reinsurance pool aimed at helping reduce health care costs.

The proposal would shift the state from the federally facilitated exchange under the Affordable Care Act (ACA) to a system run by Michigan, over a one-year transition period. The change would aim to lower administrative costs, allowing the state to redirect savings into other programs and efforts, such as increasing the enrollment rate in Michigan and giving the State more flexibility in managing health care.