In the interview with Steve Wilson, Andrew Hetzel from Blue Cross stated: "Actually what we're trying to do is to continue to be a financially stable health insurance company." Last December, the Detroit Free Press quoted President Dan Loepp as saying: "We've got a business to run. This isn't a charity." Both Hetzel and Loepp have it wrong. They think Blue Cross is an insurance company--which it is not--and they don't think it is a charity--which it is.
PA 350 forbids Blue Cross from being engaged in insurance:
"A health care corporation shall not market or transact, as defined in sections 402a and 402b of the insurance code of 1956, 1956 PA 218, MCL 500.402a and 500.402b, any type of insurance described in chapter 6 of the insurance code." MCL 550.1206
"The corporate name shall not include the words insurance, casualty, surety, health and accident, mutual, or other words descriptive of the insurance or surety business, and shall not be so similar to the name of an insurance or surety company doing business in this or other states at the time of incorporation so as to tend, in the judgment of the commissioner, to create confusion in identity with that insurance or surety company." MCL 550.1202.
PA 350 declares Blue Cross to be a charity:
"Each corporation subject to this act is declared to be a charitable and benevolent institution and its funds and property shall be exempt from taxation by this state or any political subdivision of this state." MCL 550.1102
Attorney General Jennifer Granholm held that "the Michigan Legislature created a charitable trust for the benefit of Michigan's citizens." Attorney General Opinion 7115, issued July 30, 2002.
The Michigan Supreme Court has stated that "BCBSM is a unique statutory creation, distinct from a private insurance company in that it is not carried on as an insurance business for profit." Blue Cross Blue Shield of Michigan v Governor, 422 Mich 1 (1985).
Thirty years ago, the Michigan Supreme Court had this to say about Blue Cross--it's amazing how true it is today:
"We must deal with a program which has come full circle; the very entity established to assure the availability of medical care to persons in this State is engaged in a course of conduct which, if not checked, could result in a health care system so prohibitively expensive that medical care will be unavailable to those same people it was established to serve."
Blue Cross Blue Shield of Michigan v Commr, 403 Mich 399, 438 (1978).
