Blue Cross small group rate increase lowest in six years

July 15, 2011
| By Pete Daly |
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Blue Cross Blue Shield of Michigan has announced its small group customers will face an average increase of 7.4 percent this fall, the lowest rate increase in six years.

Lower increases mark fourth-quarter 2011 group rates for both BCBSM and the Blue Care Network HMO.

A BCBSM announcement from its Detroit headquarters stated that this year’s fourth-quarter statewide area average rate increases are the lowest they’ve been since 2005.

“We are very pleased to see these moderate rate increases for the fourth quarter of 2011,” said John Dunn, vice president of middle and small group sales at Blue Cross Blue Shield of Michigan.

Dunn said they were able to lower the annual rate increase this year “by introducing new products, improving cost controls through our innovative partnerships with doctors and hospitals to improve quality and efficiency,” and through administrative cost-cutting.

In 2006, the statewide average rate increase for the Blues small group market was 8.1 percent. It reached 9.2 percent in 2008, then dropped back to 8.8 percent in 2009. There was a whopping 13.1 percent rate jump last year.

Rates for Blue Care Network HMO are experiencing “a moderate inflationary adjustment” for fourth-quarter 2011, according to the company’s statement. That 2011 rate is an increase of 8.7 percent, compared to an increase of about 11 percent last year.

BCBSM attributed the lower rate for BCN this year to “moderating health care trends.”

The largest rate increases for BCN in the last 12 years were from 2001 through 2003, ranging from 17 to 18 percent. The rates then began to decline, culminating in an increase of about 4 percent in 2006. Increases for the following three years were at or below 8 percent, but jumped to 11 percent in 2010.

Blue Cross Blue Shield of Michigan, a nonprofit organization, provides and administers health care benefits to more than 4.3 million people in Michigan, plus additional members of Michigan-headquartered groups who live in other states.

According to the federal Centers for Medicare and Medicaid Services, all health insurance rate increases will be subject to state or federal review beginning in September, under the Affordable Care Act.

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