Schuette requests formal hearing in Blue Cross Medigap Rate Case

Attorney General Bill Schuette today announced he has filed a petition for a rate hearing with the Office of Financial and Insurance Regulation (OFIR) for the purpose of opposing a proposed 12.5% rate increase for Medigap subscribers by Blue Cross Blue Shield of Michigan (BCBSM). The proposed rate increase affects approximately 215,000 Michigan seniors who have Medigap health coverage through BCBSM.

''Every dollar counts for Michigan seniors on fixed incomes confronting rising healthcare costs,'' said Schuette.

BCBSM originally requested the rate increase for Medigap subscribers in its August 6, 2010 filing with the state Office of Financial and Insurance Regulation. Schuette filed today's request for hearing under powers set in the state Nonprofit Health Care Corporation Reform Act, stating that Blue Cross should instead use its surplus to avoid rate increases.

In addition to the proposed 12.5% rate increase, BCBSM is requesting a new rate schedule for seniors on Medigap. Currently all Michigan seniors pay the same rate for Medigap coverage through BCBSM, as required by state law. Blue Cross is now requesting five different rates based upon income, residency, and whether the subscriber receives assistance from others or their former employer to pay their Medigap premiums. This new rate schedule could result in some Michigan Medigap subscribers facing rate increases higher than 12.5%.

In its last Medigap rate filing in 2009, BCBSM requested an increase of 36.7%. After intervention by the Attorney General's Office, the final rate increase was reduced to 3.8%, saving 200,000 Medigap subscribers $86 million in the first year alone.

Copyright © 2011 State of Michigan

Published: Thu, Mar 31, 2011