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In the News
MAIA's Government Affairs Department is hard at work watching out for your interests. Some of our recent advocacy issues include
Recent Legislative Activity
Governor Continues Pursuit of Federal State Partnership Health Insurance Exchange
Due to philosophical differences among house republicans and a lack of answers by the federal government to legislator questions, the state, rather than providing for a state based healthcare insurance exchange, will instead move to partnership with the federal government to create an exchange.
A Federal/State Health Insurance Exchange “Partnership” requires Michigan to fulfill two functions of the exchange while the Federal Government handles the bulk of the exchange work. The state would be responsible for plan management (DIFS currently does this) and consumer assistance. “Consumer assistance” would identify and oversee “navigators” and other “in-person-assisters” who will help individuals or businesses through the exchange. State oversight of the consumer assistance piece is subject to a legislative supplemental appropriation of a $31 million grant from the federal government. Should the legislature not act, then the Feds would reassume responsibility and Michigan would have no say in the navigator’s role in the exchange, enrollment of clients, or accountability standards. MAIA continues to work closely with other stakeholders in conjunction with the Snyder Administration and legislature to do what we can to protect the agent’s role in the health insurance arena and Michigan’s ability to protect consumers with proper accountability standards for all who will assist in the exchange. The state house recently passed this supplemental appropriations bill. However, legislative support in the senate of this appropriation is uncertain as of today…but you can help!
A call or email to your state senator could be very crucial. Many legislators have expressed a reluctance to have anything to do with all things related to the Patient Protection and Accountability Care Act (PPACA) because of what they have been hearing from some in their districts. We are told that they have not been hearing from agents. You can change that and help legislators understand the need for state oversight of this program. Thank you for making a difference!
Click here, fill out your home address, find your legislator’s contact information and call or email your representative. Ask that they support the $31 million appropriation for the following reasons:
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The PPACA is the law of the land and it will be implemented despite opponents’ efforts to derail. The President and his Administration has another 3 plus years to ensure that happens. The U.S. Supreme Court decision and the election are now behind us. It is time to move on.
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An unusual scenario: Accepting the federal money will provide for more state control in the operation and oversight of the exchange. Reject the federal money and the state will have less control and oversight over those entities that will be interacting (“assisting”) with your constituents and business that choose to purchase their insurance through the exchange.
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Currently, the state requires strict licensing and accountability standards of agents who sell insurance. This protects consumers and ensures that only trained and competent individuals are allowed to counsel and help others with their insurance needs. The feds, in relation to other states, have implied that Navigators and other assisters cannot be held to the same standards despite performing agent functions such as enrolling and counseling applicants.
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If the grant is not appropriated and the money returned to the feds, the state is still on the hook for technology upgrades to accommodate the federal exchange to the tune of about $10 million… in state tax dollars. In addition, there will be other costs associated with the state’s remaining responsibility of plan management.The supplemental will contain strong intent language that will offer definitive roles for navigators that will protect Michigan consumers by insisting on accountability standards and a level playing field with the agent community.
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The $31 million federal grant for the exchange responsibilities is not the same as the expansion of the Medicaid that the Governor is promoting (although he wants the exchange funding also).
For additional information related to the implementation of the PPACA and the impact it may have on your livelihood you can click here for “The Latest on Federal Healthcare Reform. Please also feel free to contact Scott Hummel (517-327-8038) with your related questions.
BCBSM Conversion II
BCBSM would become a non-profit mutual insurer and would now be governed under the insurance code as are all other health insurers, instead of PA 350. Among the changes, BC would now have to pay state and local taxes to the tune of $100 million and the Accident Fund would no longer be restricted from offering other lines of insurance. Additional impacts include: The penalty on Blue Cross' small-business and individual customers to the tune of more than $200 million a year to subsidize other lines of insurance coverage would be eliminated; Blue Cross will continue as a carrier of last resort until Jan. 1, 2014, at which time new federal laws will require all insurers to offer coverage to anyone regardless of health status; Create a nonprofit charitable entity funded with $1.6 billion in contributions from Blue Cross made over the next 18 years to improve the health of all Michigan residents; Freeze Medigap" coverage rates for four years after which time Medigap coverage will be subsidized by the nonprofit fund for another 4 years based on a means test; Eliminate BCBSM Most Favored Nation agreements; and Remove the Attorney General’s oversight role in BCBSM’s rate setting process. The Governor vetoed this legislation over abortion related concerns last year. SB 61 and 62 have passed both chambers without the controversial language and are awaiting the Governor’s signature. MAIA supports the conversion.
No-Fault Reform II
Last year No Fault Reform failed to gain the necessary critical mass needed to see action due to lagging legislative support and a changing target among industry stakeholders. Consensus among industry stakeholders now appeared centered on the Commissioner’s proposal that would: Provide a cap of $1million; allow insurers to negotiate with providers based on an average reimbursement rate of current health insurance carriers (Medicare and Medicaid excluded); address Attendant Care Costs; and create a new MCCC (Michigan Catastrophic Claims Corporation) to pay for claims costs from $500,000 to $1 million. The MCCC would provide transparency that the MCCA did not have. Carriers would be responsible for the first $500K of a claim and then would turn over financial and administrative control to the MCCC. The proposal would also include establishing a Fraud Authority by expanded the mission of the Auto Theft Prevention Authority (ATPA) to include stopping auto insurance fraud. The Carriers would be assessed by proportion of their share in the auto insurance market, would raise $21 million for the ATPA with $6 million still going toward theft prevention. MAIA supports reform but is waiting for language to be developed before final support is endorsed.
MAIA initiative eliminates lowest quote requirement
FYI, the following had been previously reported at the end of last year, but in case you missed it, continues because of its impact to our industry:
When the Governor created the Office of Regulatory Reform Insurance and Finance Advisory Rules Committee (ARC) in June, 2011, and selected 12 individuals to serve on it, MAIA was once again the only voice representing independent agents. This provided your Association the opportunity to put forth its arguments for eliminating the lowest quote requirement (MCL 500:2116) under the 1981 Essential Insurance Law, as well as eliminating the current $3 fee required when agents file a change in mailing address. Both initiatives became part of the recommendations put forth by the ARC, incorporated into HB 5890 and HB 5891, and have been passed by the Legislature and signed into law by the Governor.
Changes incorporated into additional ARC bills, SB 1305 and HB 5891:
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Eliminates the mandate that carriers annually mail a description of all rating classifications and factors used to determine an individual rate if such information remains available upon request.
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Allow, under certain criteria, to electronically post policies and endorsements if personally identifiable information is removed and the information is easily accessible and free;
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Eliminate the existing $300 cap on deductibles allowed to be offered by insurers on PIP;
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Eliminate the mandate that carriers offer coordinated health and accident coverage deductions – the practice becomes permissive;
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Eliminate the restriction on using surcharges to determine premium and allows the use of both surcharges and discounts.
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Eliminate the restriction on affiliate insurers from using underwriting rules providing identical coverage that would permit a person to be insured with more than one of the affiliated insurers.
Effective advocacy is not always measured by what passes, but also in what may not pass the legislature.
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MAIA successfully halted legislation that would make it an unfair trade practice to use a producer designation indicating some type of senior specific expertise. The regulation would have created confusion and was not supported by actual complaints;
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Also delayed were bills that would prevent PIP benefits from being available to individuals for auto related personal injuries if: they are here illegally (HB 4993); they are a “knowing” passenger in a stolen vehicle (HB 5889); they are using a vehicle in commission or flight from a commission of a felony as defined by law (HB 5887); or they were convicted of driving “under the influence” (HB 5888). Although the intent was understandable, MAIA was concerned with the overly broad language and even thought amendments were added to narrow the scope and impact of the bills, MAIA opposed them as voted out of Committee.
Enforcing Michigan's No Fault Law - Progress!
As you may remember, In 2011, legislation was passed that required Insurance Carriers to provide the Michigan Secretary of State (SOS) the Vehicle Identification Number (VIN) and other information every two weeks of vehicles covered with Michigan No Fault insurance. If a VIN drops off the “covered” list provided by carriers, it is red-flagged by the SOS. If someone attempts to renew plates with a VIN that is red-flagged, proof of insurance or a Certificate (COI) is required to purchase plates. The SOS offices have begun to follow up these cases by calling agencies (or carriers in some cases) on the COI to verify no-fault coverage. According to the SOS, the Electronic Insurance Verification (EIV) effort has resulted in a significant number of fraudulent COI being used/discovered. As a result, the SOS is now developing processes to address specific cases involving the use of fraudulent and outdated COI.
It should be noted that a stored vehicle that only has comprehensive coverage is not covered by Michigan no-fault insurance and therefore the SOS cannot legally issue plates for that vehicle. However, there are alternatives to address this lack of coverage for your clients: let the plates expire and pay the $10 late fee; use a one day binder; or for historical vehicles, a lifetime plate.
Finally, the SOS will eventually begin sharing this information with LEIN (Law Enforcement Information Network). This will enable road patrol to verify insurance coverage electronically. Obviously, with the two week downloads there may be a situation where the lag time requires the continued use of a COI.
For more details or questions on any of the above, please contact MAIA VP Government Affairs/Membership Scott Hummel at shummel@michagent.org.
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