For years, BCBSM has had education-specific programs that were developed to compete
with the MESSA plans before MESSA selected BCBSM as its underwriter. The plans were
identified as "4.0" plans and included the highest benefits BCBSM could offer
under state regulations. These were benefit-rich plans by BCBSM standards but they still
could not reach the benefit levels of MESSA due to the fact that they were limited by the
benefit scopes that had been approved for BCBSM by the Michigan Insurance Commission.
Additionally, BCBSM could not pay nonparticipating physicians, as MESSA does, because of
their agreements with participating physicians.
Some districts which were successful in negotiating these "4.0" plans had
them eliminated by BCBSM in the late 1980s when MESSA began questioning why BCBSM should
compete with its block of business. The groups that already had these attractive plans
were allowed to have them "grandfathered in" by BCBSM. However, under the
agreement with MESSA, districts or segments of school employees in districts desiring a
"4.0" plan that did not fall under the grandfather rule were disallowed from
joining a "4.0" BCBSM plan.
For example, when a large public school district in southeastern Michigan researched
its options three years ago, it went to BCBSM to see if it would allow the teachers to
have the "4.0" plan. This was a logical option for the district because the
administrators' group already had the "4.0" plan in place. The district was
denied because the "grandfather" provision applied only to identifiable segments
which had the coverage and could not be expanded to include another segment or the entire
group.
These BCBSM plans along with other more traditional plans are currently in place in
some districts which have been successful at the bargaining table. Most of these
traditional plans have been in place for a number of years and are performing well for the
respective districts.
The rating for these plans follows the standard rating methodologies BCBSM has filed
with the Insurance Commission for not only school groups, but all groups in general. This
means that for a group of more than 100 individuals, the group is experience-rated and has
the option of being self-funded. For groups of fewer than 100, the group is community- or
area-rated. This approach is similar to that used by MESSA and SET.
