Annual Report 2010 Mission Statement The mission of bluesPAC is to provide its members with a collective opportunity to be involved in the political process for the good of the organization and the communities it serves by supporting candidates whose political views are closely aligned with those of Blue Cross Blue Shield of Michigan, Blue Care Network, LifeSecure, and the Accident Fund Insurance Company of America. 2 Table of Contents Message from the Board ................................................4 2010 Key Issues ...............................................................6 Board of Directors Overview ..........................................8 2010 bluesPAC Board Members ....................................9 2010 Financial Overview ...............................................10 2010 Statement of Operations ..................................... 11 Acknowledgement to our Contributors ....................... 12 2010 PAC Contributors ................................................. 13 2010 Contributions .......................................................27 3 Message from the Board 2010 was a dramatic year as we watched the were few whispers about the potential for races for governor, attorney general, movement, but they were quickly dismissed secretary of state, 15 congressional seats and as impractical. In late November and all of the state legislative seats unfold. Your December we turned our focus to the next support allowed bluesPAC to actively legislative session and began the process of participate in the campaigns of 153 educating new and returning lawmakers candidates during the general election period about the Blues enterprise and the need for and achieve an outstanding win ratio of 88%. regulatory reform. Earlier in the year, we watched with Throughout the year, bluesPAC membership uncertainty as President Obama signed remained healthy. With the Michigan national health care reform legislation into economy still lagging, we are especially law. As a result, BCBSM created a new grateful that you continued to support department, the Office of National Health bluesPAC in 2010. Your contributions create a Care Reform, and so began the task of united voice in Lansing, Washington, D.C., deciphering the new legislation and what it and in many local municipalities. As meant for the enterprise. lawmakers focus on issues that affect the future of the enterprise, our collective voice Meanwhile, on the state level there was remains very important. Thank you for dwindling hope of the current legislative body continued loyalty! passing any form of individual market reform. As we entered the lame duck session, there 4 5 2010 Key Issues This past year was a very unique – and department, had a successful impact on: extremely challenging – year in Washington. The November 2010 elections brought with it • Medical Loss Ratio (MLR) Calculation a new wave of Republican leadership in the – The Patient Protection and Affordable U.S. House of Representatives where Care Act mandates that health insurers Republicans will hold a 242-193 majority must spend at least 80 to 85 percent of entering into the 112th Congress. Republicans premium dollars on direct medical expenses were also successfully in narrowing the gap in in the individual and group markets, the U.S. Senate where Democrats now only respectively. The law however failed to hold a narrow six seat majority. This new define what should be included in the MLR political environment made bipartisanship calculation. BCBSM was successful in even more important during the last part of working with regulators to ensure an 2010 legislative session when Congress adequate MLR calculation was included in approved a major tax package and several the regulatory process. other significant non-health related bills. • 833 Tax Deduction – Insurers will need to meet the MLR requirement in order to In years past, BCBSM’s Governmental Affairs receive the special 833 tax deduction that team has had one or two high-profile priority Blue Plans receive. BCBSM was successful in issues — such as opposing a new government advocating for a technical correction to the run health plan or opposing association health Patient Protection and Affordable Care Act plans — 2010 however presented a vast array with the Department of Treasury for the of smaller profile yet highly critical issues that special 833 tax deduction, syncing the 833 could have had significant business impacts MLR with the overall MLR calculation in the for the enterprise. This past year, BCBSM bill and decoupling the MLR requirement continued to focus on the implementation of with the ability to be “deemed” as an the Patient Protection and Affordable Care insurer. Act (ACA) seeking both legislative and regulatory changes to modify some of these • Level Playing Field – BCBSM continued to concerns. safeguard existing language in the ACA that ensures all entities that provide health The following are just a few of the federal insurance in a state be regulated equally issues that BCBSM’s Governmental Affairs and on a level playing field. BCBSM team, in conjunction with the Public Policy continues to work to expand the scope of 6 level playing field beyond market reforms in The legislation would have had significant order to increase competition and drive cost implications on state and local down costs for the consumer by avoiding governmental units, as well as the private adverse selection. sector. Early intensive behavioral On the state level, over 200 pieces of intervention therapies, such as Applied legislation were introduced in 2010 with the Behavior Analysis (ABA) therapy, can cost potential to impact the Blues. Governmental tens of thousands of dollars per year and is Affairs and Public Policy teams worked still considered investigational. For BCBSM together, along with subject matter experts alone, coverage costs could have equated to analyze and form positions on each bill. to $55 million or more per year. Subscriber Fortunately, BCBSM was able to work closely groups can continue to purchase coverage with state legislators to block or alter all for ASD if they choose. legislation posing a threat to the enterprise. A • Drug Shopper – GA worked with few of the 2010 key state legislative issues Representative Andrew Neumann follow. (D-Alpena) to develop draft legislation, requested by the BCBSM Corporate and • MIChild – For the fourth straight year, Financial Investigations Division, to prevent Governmental Affairs (GA) was able to individuals from doctor shopping in order to thwart the efforts of the Senate obtain schedule 2 through 5 narcotics on a Appropriations Department of Community routine basis. The bills aimed to make it Health Subcommittee to convert the easier to prosecute and seek restitution for MIChild program, serving over 27,000 the cost of those health care services low-income children, from BCBSM to associated with drug shopping. In a victory Medicaid managed care. With many for BCBSM and other health insurance physicians refusing to take on additional carriers, the bills were signed into law by Medicaid caseload because of the low Governor Jennifer Granholm as 2010 Public reimbursement rates, this change would Acts 354 and 355 and given immediate have limited access to medical care for effect. many low-income families. By working to convince the Michigan Legislature and key leaders that the change would jeopardize access to health care, BCBSM was able to retain its role as the primary administrator of this valuable program through the 2011 Fiscal Year. • Autism Spectrum Disorder (ASD) – BCBSM, along with business and labor allies, was successful in lobbying to block legislative action on mandated coverage of ASD during the lame duck session of 2010. 7 2010 BluesPAC Board of Directors Overview During 2010, the eight member bluesPAC Meanwhile, the entire 2009-2010 board board convened six times to discuss official continued to serve, providing superior business. The four officers of the board were oversight of the PAC in accordance with the appointed in year’s past by Blue Cross Blue Governmental Affairs team. The board’s main Shield of Michigan President & CEO, Daniel J. responsibilities included: Loepp, while the four at-large members were elected by bluesPAC members in 2008. • ensuring efficient and ethical operation of the PAC With 2010 marking the second year of the • providing superior member representation, two-year term of the elected board members, and bluesPAC held board elections for the four at-large seats in the fall. All PAC members • promoting membership growth. first had an opportunity to submit their Thank you to the bluesPAC directors for application for candidacy. There were six superbly serving our members throughout candidates in all; just one of which was an the past two years. incumbent. Members voted, and in December the newly elected members were announced with their term beginning in 2011. 8 2010 bluesPAC board of Directors Jeffrey P. Rumley, Chair Bill Brown, Vice President and Member-at-Large General Counsel Agent Liaison, Individual Business Unit Lynda Rossi, Vice-Chair Judy McChester, Senior Vice President, Member-at-Large Public Affairs Marketing & Customer and Chief of Staff Relations, Ford, Chrysler &Visteon Accounts Mark A. Cook, Treasurer Kelley J. Root Vice President, Member-at-Large Governmental Affairs Regional Sales Director Laurine Parmely, Tricia Keith, Secretary Member-at-Large Vice President, Corporate Principal Counsel, Health Secretary and Services Care Value