A recently released report from the American Medical Association casts some doubt on the insurance market in Michigan. The report shows that the state has the fourth least-competitive health insurance market in the U.S. The findings are the result of rigorous studies done throughout the country to find how many companies are actually participating in the various markets. The lackluster status of Michigan’s market may be due to the fact that Blue Cross Blue Shield encompasses the majority of the market.
According to the report, the large insurance corporation controls nearly 80% of all health insurance policies in Michigan. The overwhelming presence of the insurer makes it difficult for other companies to enter into the market and find any real success. The lack of competition allows Blue Cross Blue Shield to enjoy higher rates as they are the most influential company in the state.
In response to the report, Blue Cross Blue Shield insists that its size allows the company to provide discounts to consumers. Without adequate competition, however, the value of these discounts is subjective. State lawmakers have been debating whether the company should be subject to the regulations imposed on commercial insurers due to its size. Such a plan would not happen until next year, however, and the idea is generating a fair amount of controversy as the new regulations governing the company would allow Blue Cross Blue Shield to raise their rates exponentially.