BCBSM’s commitment to charitable mission is clear

Andrew Hetzel

| 3 min read

Gov. Snyder’s proposal to transition Blue Cross Blue Shield of Michigan to a nonprofit mutual health insurer received overwhelming bipartisan support in the Michigan Senate last week. Still, people who are concerned about the legislation continue to advocate for changes. Unfortunately, some advocates continue to confuse the BCBSM transition for what it is not – the sale of our company.
There are numerous provisions included in the Senate legislation that prohibit BCBSM from being sold or otherwise converted into a for-profit, stockholder-owned company. These include:
Senate Bill 1293
  • Sec 5801(2) a nonprofit mutual “shall not convert its status to a stock insurer…”
  • Sec 5825(1) a member of a nonprofit mutual… “shall have no interest in, or residual rights to, the assets…; shall not receive policy or surplus dividends; and shall not be required to pay capital assessments…”
Some have alleged that BCBSM is abandoning its charitable mission. But this is far from factual. The Governor’s proposal creates the Michigan Health and Wellness Foundation to be the recipient of BCBSM’s ongoing charitable contributions. This independent organization would receive $1.5 billion in contributions from BCBSM over the coming 18 years to invest in keeping coverage affordable, improving public health and protecting vulnerable people.
In the unlikely event that far into the future, BCBSM is converted and sold, the state of Michigan would be able to capture the fair market value of BCBSM at the time of sale:
Senate Bill 1293
  • Sec 5825(2) in the event of dissolution or windup, any residual value remaining after satisfaction of claims… “shall be distributed for the benefit of the people of this state to the Michigan Health and Wellness Foundation…”
  • Sec 5825(3) in the event of a transaction or series of transactions resulting in another person or entity acquiring greater than 50% beneficial ownership interest in a nonprofit mutual insurer, the nonprofit mutual insurer or the acquiring party “shall make payment for the benefit of the people of this state to the Michigan Health and Wellness Foundation”…in an amount “equal to the greater of the acquisition price or the fair market value of the nonprofit mutual insurer on a consolidated holding company basis”
This legislation enables Michigan to have a regulatory system – for the first time in 32 years – where all insurers play by the same rules. It retains BCBSM as a Michigan asset and a nonprofit with a substantial charitable focus far into the future. It is the result of a deliberative and inclusive process, with more than 25 organizations lending a voice throughout the Senate’s work. Now that the legislation is ready to be taken up by the Michigan House of Representatives, the people of Michigan can be assured that the changes to Blue Cross and our health insurance system are being carefully considered and that the public interest is being well-served.
Andrew Hetzel is vice president of Corporate Communications for Blue Cross Blue Shield of Michigan.

Leave a Comment

Your email address will not be published.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.


MI Blues Perspectives is sponsored by Blue Cross Blue Shield of Michigan, a nonprofit, independent licensee of the Blue Cross Blue Shield Association