Mich. AG: Blue Cross agreement is working for seniors

Jessica M. Karmasek Jun. 30, 2011, 10:30am


LANSING, Mich. (Legal Newsline) - Michigan Attorney General Bill Schuette said this week that an agreement with Blue Cross Blue Shield of Michigan has resulted in "major reductions" in proposed insurance rate increases for more than 200,000 seniors.

Schuette said the agreement, reached following negotiations with his office, the Office of Financial and Insurance Regulation and BCBSM, will save those seniors close to $35 million.

"These savings are critical for Michigan seniors on fixed incomes confronting rising health care costs," he said in a statement Tuesday.

Blue Cross was seeking a 21.7 percent average rate increase for all Medigap subscribers along with a sliding scale rate increase up to 94 percent, depending on a subscribers' income, whether they had an HRA or whether they receive premium assistance from non-family sources such as the Kidney Foundation or Cancer Society.

The original rate increase request sought to increase the rates for Medigap seniors by up to 94 percent -- from $111.16 up to $215.32 a month.

Schuette filed a preliminary injunction in circuit court and forced a hearing on both the overall rate increase and the newly proposed sliding scale rate increase factors.

In his intervention request and through negotiations, the attorney general challenged the lawfulness of the income contingent rate increase -- with increases up to 30 percent -- the HRA-based rate increase -- an increase ultimately up to 94 percent -- and the premium assistance based rate increase -- an increase ultimately up to 94 percent. Schuette also challenged the amount of the overall 21.7 percent rate increase as being unaffordable for Michigan seniors.

Tuesday's agreement eliminates the proposed sliding scale rate increase and allows an overall rate increase of only 9 percent for Medigap seniors.

The new rates are expected to go into effect by Aug. 1, Schuette's office said.

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

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