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Tag: Non Profits

The Tax That Wasn't

By JGillman, Section News
Posted on Tue Oct 09, 2012 at 09:49:21 PM EST
Tags: Michigan, Health Care, BCBS, Insurance, Non Profits, 3 Billion Reasons, A Tax That Wasn't (all tags)

Michigan's Blue Cross Blue Shield subscribers have been paying it forward for a long time.

Recall a few years ago, Michigan AG Mike Cox slapped down the blues for a strange bust out into the for-profit insurance market. At the time, Cox said:

"Blue Cross has built a huge surplus with the help of state tax breaks and rapidly rising insurance premiums. They should be cutting health costs for Michigan families instead of diving deeper into the for-profit insurance industry."

Indeed.

Since that slap down, I have frequently imagined how the blues could be dis-assembled. Not at all that I wanted to, but asking the question of HOW such a structured insurer of last resort might be dissolved at some point. And to be sure, given THAT situation, there ought to have been others inside and out of government who might have wondered as well. Had it not been for AG Cox wagging the I-don't-think-so finger, a strange funneling of money to other 'for-profit' entities might have happened, costing rate payers dearly. "Who might have been the recipients and concurrent stockholders in such an arrangement that hides cash flow from non-profit reporting requirements?" could have been the question at hand.

But no worries, right? That big pile of money has been maintained, and leveraging high rates have made it easier for the blues to make sure it stayed available. The blues have in fact have continued to hold on to a $3 billion cash reserve and by raising those rates to keep it there, it rewards those past premium payers with the knowledge that they have solved the next hole in the Michigan state budget. Or even better, have given the governor a new potential slush fund.

Continued below.

(2 comments, 572 words in story) Full Story