State insurance chief OKs two Blue Cross rate increases for seniors

State insurance chief OKs two Blue Cross rate increases
Senior, individual policies involved

BY PATRICIA ANSTETT
FREE PRESS MEDICAL WRITER

Michigan's insurance commissioner has approved a 4.7% interim increase in Blue Cross Blue Shield of Michigan Medigap policies for 210,000 seniors.

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Ken Ross also approved an average 22% rate hike for individual and group conversion policies purchased by 163,000 individuals outside the workplace.

Customers won't be billed for the increases until Oct. 1, according to Helen Stojic, Blue Cross spokeswoman.

Still pending is a full rate hike request by Blue Cross to raise senior rates an average of 31%. A Sept. 14 hearing is scheduled before a Lansing administrative law judge.

Staffers with Michigan's Office of Financial and Insurance Regulation argue that the rate hike in Medigap plans could be as low as 1.6% because of lower cost trends and because Blue Cross does not collect a 1% subsidy to offset Medigap losses from employers, as allowed for by state law. If the judge agrees, customers could get a refund.

The interim rate hike will bringing monthly premiums in Blue Cross' most-popular Medigap plan, known as Plan C, to $112.12 a month, up from $107.09 a month, Stojic said.

Blue Cross had sought higher rate hikes for policies for non-elderly adults but agreed to lower the amounts after state Attorney General Mike Cox requested a hearing to challenge the increases.

The company has said it faces more than $1 billion in losses through 2011 on its individual business. Cox and others argue that Blue Cross should use its $2.4-billion surplus to offset rate hikes, but earlier this year, a judge ruled that Blue Cross did not have to tap the fund to set rates.