LANSING – The Michigan House has approved legislation that would change Blue Cross Blue Shield of Michigan to a nonprofit mutual insurer from a charitable nonprofit.

In making that change, the chamber required that Blue Cross packages make abortion coverage opt-in rather than opt-out.

The bills (SB 1293 and SB 1294 ) moved on largely party-line votes, with a few Republicans joining Democrats in opposing the bills.

The Senate concurred with the changes, and sent the package onto Governor Rick Snyder.

The chamber adopted new H-4 substitutes for the bills on the floor. Rep. Pete Lund (R-Shelby Township), chair of the House Insurance Committee that addressed the bills, said the new substitutes put in language regarding most favored nation clauses in hospital contracts that was omitted from the substitutes reported from the committee.

Democrats raised objections when the new substitutes were offered, saying they had not been explained and called points of order for several minutes before getting explanations from Lund.

The bills passed 61-49. Rep. Joel Johnson (R-Clare), Rep. Tom McMillin (R-Rochester Hills) and Rep. Chuck Moss (R-Birmingham) joined Democrats in opposing the bills.

Sen. Joe Hune (R-Hamburg), chair of the Senate Insurance Committee and sponsor of the legislation pointed specifically to language that required Blue Cross Blue Shield to provide an additional $60 million into the special healthcare fund created within the bill and said $120 million would be used to off-set Medigap costs. He called all of the changes from the House “reasonable compromise.”

The move drew praise from a variety of quarters.

“This legislation is fair for Michigan’s health insurance industry and good for our state’s future,” Blue Cross President and CEO Dan Loepp said in a statement. “It enables Blue Cross to contribute in significant ways to a healthier Michigan, gives the Blues and our competitors a level and competitive playing field, and addresses concerns of those who depend on Blue Cross’ longstanding contributions as a nonprofit company.

Rick Murdock, executive director, Michigan Association of Health Plans, said most of his organization’s concerns had been addressed in the final versions of the bills.

“While we had identified several significant issues with the initial versions of the bills, we are pleased that the final version of the legislation included amendments that addressed the key issues that we advocated: A ban on the use of ‘Most Favored Nation’ clauses and language addressing the obligation of BCBSM to comply with the Insurance Commissioner’s order to pay their fair share of underfunding from Medicare and Medicaid and not cost shift to other payers. We continue to believe that these changes are critical in moving Michigan toward a more competitive health insurance marketplace,” he said.

“The health and well-being of Michigan residents is an essential part of our state’s reinvention,” Snyder said in a statement praising the passage. “The Legislature’s reforms to transition Blue Cross Blue Shield of Michigan to a nonprofit mutual company will play an important role in providing better access to quality health care and investment in the health of all Michiganders. I thank Senate and House leadership for their commitment to reinventing health care in Michigan, and I look forward to signing these reforms soon.”

Attorney General Bill Schuette, however, said the bills still did not go far enough on Medigap. “We need a full and complete commitment to seniors, one that protects them from a looming Senior Cliff, which could cause skyrocketing Medigap rate increases for Michigan’s most vulnerable,” Schuette said. “That is unacceptable, and as a result, I cannot support the legislation.”

In particular, the bill could allow Medigap rates to increase 66 percent in August 2016 and the attorney general would not have oversight of those future rate increases.

INEFFECTIVE TEACHERS: For those teachers rated ineffective two years in a row, school districts would have to notify parents that their child has been assigned to that classroom and the parents would have to consent to that placement under HB 5776 , passed 60-49.

As passed, the new notification program would begin for the 2015-16 school year to give time for the new statewide teacher evaluation system to be implemented.

While the vote was bipartisan, Rep. Maureen Stapleton (D-Detroit) was the sole Democrat to support the legislation. Rep. Anthony Forlini (R-Harrison Township), Rep. Ken Goike (R-Ray Township), Rep. Matt Lori (R-Constantine), Rep. Peter Pettalia (R-Presque Isle) and Rep. Sharon Tyler (R-Niles) joined Democrats in opposition.

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