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Blue Cross overhaul hearings in Lansing today

Blue Cross Blue Shield would undergo major changes under proposed legislation.
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Blue Cross Blue Shield building on Lafayette in Detroit.

Hearings on overhauling Michigan’s biggest health insurance provider continue today in Lansing.

Critics and competitors say other insurers have been forced to subsidize Blue Cross because the company negotiated contracts with many hospitals requiring them to accept payments lower than what they offer any other insurance company.

The practice led to anti-trust lawsuits and an order by the state insurance commissioner banning what’s called “most favored nation” clauses without his prior approval.

Blue Cross defended its efforts to control its costs because it’s required by law to accept all customers regardless of their pre-existing conditions.

That means the Blues has to accept the most-expensive applicants who can be rejected by other insurers.

All that changes with the new federal health care law, which forbids rejecting applicants for pre-existing conditions.

Blue Cross says the legislative overhaul is necessary if it’s going to compete in the new healthcare marketplace.

Rick Pluta is Senior Capitol Correspondent for the Michigan Public Radio Network. He has been covering Michigan’s Capitol, government, and politics since 1987.
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