July 16,  2009

LANSING - Attorney General Mike Cox today said that Speaker of the House Andy Dillon's proposal for reducing health costs holds great promise and must be taken seriously by legislative leaders and the governor. Cox, who has been a vocal and consistent supporter of Michigan's healthcare consumers during the ongoing Blue Cross Blue Shield health insurance reform debate, has also been an advocate for increased pooling and bringing public employee health costs in line with other states.

"By increasing the use of pooling and bringing Michigan's public employee health costs down to the national average, we can reduce costs while protecting quality coverage," said Cox. "Speaker Dillon is doing the right thing by moving this debate forward and I stand ready to work with him. Governor Granholm and the other legislative leaders must also give this proposal serious consideration."

Cox has been at the forefront of the debate for lowering health costs. In January 2009, Cox recommended that the legislature increase the use of pooling in any health reform because, as Cox noted at the time, larger pools provide stronger purchasing power and lower costs. As an example, Cox cited the July 2005 Hay Group study, ordered by the legislature, which found $150-$300 million in savings by pooling all public school employees into one plan.

Additionally, Cox has argued that Michigan's public employee health costs must be brought down to the national average. Cox pointed to a 2008 Detroit Renaissance report that found Michigan could save as much as $269 million per year if public employee health costs were brought in line with the national average of other states.

Cox said that as the manager of approximately 470 state employees, he sees everyday how healthcare costs are affecting decision making, including the recent layoff of 21 employees. Statistics from National Conference of State Legislators show the amount the State of Michigan pays for employee health insurance premiums more than doubled from 1999 to 2006, rising from $545.18 to $1,249.76. Making things worse, the 2006 amount was $237.09 per month higher than the average cost of all 50 states ($1,012.67).

"Rising public employee health costs must be addressed because they are contributing to the structural budget deficit, leading some in Lansing to openly consider more tax increases," Cox said.

"But, as the leaders of state government, we have a responsibility to enact reforms that reduce the cost of government because a tax increase is out of the question."

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