- change ups
BCBSM Medigap Rate Hike
Delayed For Hearing
LANSING — The state attorney general has forced a hearing that delays a proposed 50.3 percent rate hike for more than 200,000 Blue Cross Blue Shield of Michigan Medicare supplemental members.
A date for the state insurance commissioner’s hearing is uncertain, said Kathy Fagan, spokeswoman for the Office of Financial and Insurance Services. It must occur by July 25, 30 days after the attorney general’s action.
Without Attorney General Mike Cox’s request for a hearing, the rate hike would have gone into effect automatically on July 1.
The insurance, often called Medigap, covers services and co-pays that Medicare does not for those age 65 and older and the disabled enrolled in the traditional Medicare program.
The attorney general’s press release indicated that 215,000 people, or 17 percent of the state’s population older than age 65, would be affected by BCBSM’s proposed rate change. Most monthly premiums would rise from $89.99 to $135.25, or $1,080 to $1,620 annually.
“That is a big increase at any point in life, but when you’re on a fixed income, it’s really big,” said Jo Murphy, director of the Medicare Medicaid Assistance Program.
BCBSM released a statement that indicated it lost $200 million on “Part C” business in 2006. It’s been eight years since BCBSM saw a rate change for the Medigap market.
“While the decision to request a rate adjustment was not taken lightly, because of continuing increases in medical costs, an adjustment is necessary to ensure the long-term stability of the coverage for the Medigap population,” the nonprofit’s statement read.
The change would still place BCBSM’s annual Medigap rate below the state average of $2,355 and the
“I know Blue Cross has tried hard to move people from supplemental insurance to Medicare Advantage plans,” Murphy said. “They’ve probably been losing money on supplemental. The rate of reimbursement is higher than original Medicare, so it would be to Blue Cross’ benefit.”
Medicare Advantage is a managed health care plan offered by several insurance companies. It combines Medicare’s hospital and doctor coverage, and some versions include the Part D prescription plan. BCBSM’s version, Medicare Plus Blue, offers premiums in four levels up to $200 per month.
“A lot of people have had original Medicare with supplemental insurance for years. It’s worked well for them and they’re happy with it,” said Murphy, adding that she has fielded several phone calls from consumers worried about the rate increase. She said she has urged them to contact Insurance Commissioner Linda Watters.
In a press release, Cox said 90,000 of those affected by the BCBSM proposal have incomes between 136 percent and 200 percent of poverty level. They do not qualify for government assistance with Medicare premiums, co-pays or deductibles. For 2007, the poverty level is $10,210 for a one-person household and $13,690 for two persons.
The proposed rate increase does not include prescription coverage plans.