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Something unexpected occurred when Jackson County’s public school districts and Jackson Community College sought bids for pooled health insurance protection.

No insurers would bid.

The local efforts could be considered a test situation about the effect of the 2007 think law that attempted to increase the number of college insurance coverage pools and bring much more competitors.

“Basically, what we learned was that none of the insurance businesses that had been performing company in Michigan that were contacted by about eight or 10 brokers would provide bids for us to buy like a group,” mentioned Catherine Brechtelsbauer, director of human resources and legal services for the Jackson County Intermediate College District.

Don Wotruba, deputy director for that Michigan Association of College Boards, said that because the 2007 law passed, the Jackson County team is the first he’s conscious that has tried to type a big insurance swimming pool and solicit bids — although a group of schools in the Grand Rapids area formed a swimming pool in 2005.

School officials had hoped to conserve cash by joining together to look for health insurance coverage coverage, that is becoming progressively expensive and contributing to teacher layoffs and other spending cuts.
 
Presumably, making a bigger pool of employees would spread out the risk to insurers, resulting in lower rates.

So the schools sent out two requests for proposals in April. One was to insure about 270 non-unionized college employees in the county. The other was to insure thousands of employees at the county colleges — even though for that to have happened districts also would have had to reach a deal with employee unions.

“I was disappointed that we could not provide the districts and JCC with a great chance for saving cash on benefits for their non-represented staff,” Brechtelsbauer said. “If we could save 10 percent cleanly, that is real cash for these groups. That is another individual who’s employed or another individual whose work gets saved at an additional location. Somewhere, that money might be utilized in the classroom.”

So why wouldn’t insurers bid?

Brechtelsbauer mentioned insurers mentioned that they would not do company using the school group unless it became a formally affiliated danger pool, which she mentioned would need a one-year process and could include a requirement that the swimming pool members pre-fund about 25 % of their annual premiums, which she mentioned would not be possible for districts struggling to balance their budgets.

A spokeswoman in the state’s largest insurer, Blue Cross Blue Shield of Michigan, could not be reached for comment.
 
The organization mentioned inside a letter to Brechtelsbauer dated May 15 that there had been two factors it passed:

• Since the group of colleges did not meet its underwriting guidelines, which require an insured employer groups to become a single employer that has an employer-employee relationship with everyone who’s covered.

• Simply because members with the school coalition already are enrolled with Azure Cross Blue Shield or even the Michigan Education Unique Providers Association, a third-party team that provides Azure Cross Azure Shield plans to school employees. “BCBSM will not supply benefit pricing for existing company,” wrote Gretchen White, regional manager for the insurance coverage company.

MESSA would not provide quotes because the group wasn’t an official pool, mentioned Gary Fralick, spokesman for the college employee insurer, but he said MESSA is willing to supply estimates to person districts.

ISD officials have raised concerns about Blue Cross Azure Shield declining to bid, noting that it is a tax-exempt nonprofit agency.

“It just seems to me like having Blue Cross Azure Shield, having special standing in Michigan, should need to provide us a quote,” Brechtelsbauer said.

The ISD contacted state Sen. Mike Nofs, R-Battle Creek, and think Rep. Martin Griffin, D-Jackson, with worries about the response from the Blues.

Nofs said he understands why the organization didn’t bid. “I mean, you are bidding towards yourself,” he said. “I don’t know why you would make a company bid towards itself.”

But he mentioned it nevertheless may be great to revisit the insurer’s nonprofit status. He mentioned Azure Cross Blue Shield gained nonprofit status because of its pledge to not turn down insurance for anybody. But he mentioned President Obama’s health-care reform makes that a requirement for all insurers, so there might not be considered a reason any more give the Blues tax-exempt standing.

The lack of the response towards the local schools’ request for proposals shows there’s a need for much more competitors in the Michigan insurance coverage industry, Nofs said, such as allowing people to shop across think lines for insurance coverage.

For years, numerous college administrators and Michigan lawmakers — particularly Republicans — have pushed for changes that would give colleges a much better opportunity to look for bids for wellness care coverage. MESSA, which is affiliated using the Michigan Education Association, the state’s biggest teacher union, has been a target of individuals groups.

Public Act 206, passed in 2007, attempted to produce more competition and pooling in that area and need MESSA to release claims information that its critics said had been needed to allow districts to obtain bids from other businesses.

MESSA has started providing the information, the Michigan Association of College Board’s Wotruba said, but so far only two many years of claims data is accessible.

He said he hopes other groups will attempt to form pools and look for bids despite what occurred in Jackson County because there’s the potential to conserve taxpayers money.
The local districts could eventually turn out to be a formally affiliated danger pool or join a larger pool, Brechtelsbauer mentioned.