Mich. AG requests rate hearing

Jessica M. Karmasek Mar. 28, 2011, 12:31pm


LANSING, Mich. (Legal Newsline) - Michigan Attorney General Bill Schuette has filed a petition for a rate hearing with the state Office of Financial and Insurance Regulation, opposing a proposed 12.5 percent rate increase for Medigap subscribers.

The proposed rate hike affects about 215,000 seniors who have Medigap health coverage through Blue Cross Blue Shield of Michigan.

BCBSM originally requested the rate increase for Medigap subscribers in its Aug. 6 filing with the Office of Financial and Insurance Regulation.

According to the Detroit Free Press, the hearing will be at 10 a.m. April 18 in Lansing before an administrative law judge.

"Every dollar counts for Michigan seniors on fixed incomes confronting rising healthcare costs," Schuette said in a statement on Wednesday.

Schuette filed last week's request for a hearing under powers set in the state Nonprofit Health Care Corporation Reform Act, arguing that Blue Cross should instead use its surplus to avoid rate increases.

In addition to the proposed 12.5 percent 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 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 state Medigap subscribers facing rate increases higher than 12.5 percent, Schuette's office said.

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

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

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