Michigan, health insurer reach agreement

Jessica M. Karmasek Feb. 23, 2011, 12:30pm


LANSING, Mich. (Legal Newsline) - Michigan Attorney General Bill Schuette announced on Tuesday that he, the Office of Financial and Insurance Regulation and Blue Cross Blue Shield of Michigan have negotiated a reduction in a rate increase request.

The rate increase, Schuette explained, will be slashed by up to 60 percent for approximately 200,000 state residents who buy their own health insurance.

"Every dollar counts for Michigan families struggling with skyrocketing healthcare costs," the attorney general said in a statement.

BCBSM originally requested rate increases for Non-Group and Group Conversion subscribers in its May filing with the state Office of Financial and Insurance Regulation. The Attorney General's Office then challenged the requested rate increase under powers set in state law.

BCBSM had requested an increase of 21.3 percent for 114,000 Non-Group Legacy subscribers, or those who purchase their own coverage; 17.6 percent for 58,000 Group Conversion Legacy subscribers, or those who purchase coverage after losing a job that previously offered coverage; and 7.8 to 10.9 percent for 25,000 Non-Group and Group Conversion Plus subscribers, or those who purchase age-rated high deductible plans.

After litigating the case for several months, the parties reached a settlement of 7 percent for all Group Conversion subscribers and 9.3 percent for all Non-Group subscribers.

The negotiations, the Attorney General's Office said, will result in $60 million in savings in the first year.

The agreement was codified by a final administrative order issued by OFIR on Tuesday. The rate changes will take place on April 1, Schuette's office said.

From Legal Newsline: Reach Jessica Karmasek by e-mail at jessica@legalnewsline.com.

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