Updates About Health Insurance

The Michigan Senate has passed a package of bills that would create a state-based healthcare exchange in Michigan. Similar legislation was also passed by the Senate last session. If passed, Michigan would move away from the federal healthcare exchange to a newly created exchange run by the state by January 2028.

SB 973 would create the Michigan Health Insurance Exchange and outlines the creation of a 12-member governing board, which would create and oversee a non-profit corporation that provides the health plan marketplace. It also outlines governance, oversight, funding, reporting, and enrollment requirements for the exchange, while requiring the Department of Insurance and Financial Services (DIFS) to certify the qualified health plans according to State and Federal law and the provisions of the legislation.

SB 974updates insurance code definitions to align with the state-based health insurance exchange created under SB 973.

SB 975 requires DIFS to contract with the state-based exchange to certify qualified health and dental plans.

SB 976 would require insurers to provide enrollment information required by the state-based exchange.

SB 977 requires DIFS to apply for a federal waiver to create a state-based reinsurance program and report funding needs to the Legislature’s appropriations committees.

SB 978 repeals a law requiring certain health insurance plans to cover specific emergency and early prescription refills.

Each bill passed along party lines (20-16). The bills need to be passed by the Republican controlled House and signed into law by the Governor before the current session ends in December or would need to be reintroduced again next session.

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.