Blue Cross Blue Shield of Michigan may be world’s greatest health-related rent seeker. It’s certainly one of the most effective at that game, controlling some 70 percent of the Michigan health insurance market –reportedly far more than any other state. The non-profit has made campaign contributions to every single legislator currently in office. And the latest item on their rent-seeker’s shopping list is a doozy. Here’s the scoop:

There are two ways states provide subsidies that allow chronically unhealthy individuals to buy health coverage at expensive but not astronomical rates. Michigan currently uses the “insurer of last resort” approach, granting BCBS some $100 million in annual tax exemptions to carry the load. More states use “high risk insured pool” method, where all health insurance companies kick in to provide the subsidies (which are ultimately paid by their customers, of course).

With perhaps the worst legislature in Michigan’s history currently in office, this year BCBSM decided to go for broke. At their behest a bill was introduced that would create an absurd system in which Michigan would have both an insurer of last resort and a risk pool, with all the for-profit insurers paying assessments to tax-exempt BCBSM! The bill passed the House one week after it was introduced (and with 37 out of 52 GOP votes). It’s currently stalled in GOP-controlled Senate, but sly BCBSM advocates in that body are working assiduously behind the scenes, and I wouldn’t bet against them.

Incidentally, BCBSM has succesfully met a challenge that faces all non-profit rent-seekers – how to distribute the loot. Its president was paid $1.6 million last year – light years beyond the $518,574 that was the average for all health plan executives both nonprofit and commercial, according to a survey reported in the Detroit Free Press. Many of its other execs also enjoy high six-figure compensation. Since 2004 salary and benefits packages for the insurer’s top officers have increased by more than 42%.