LANSING -Michigan Attorney General Mike Cox today announced that his intervention in Blue Cross Blue Shield of Michigan (BCBSM) rate increase requests has resulted in $160 million in savings for approximately 163,000 Michigan residents who buy their own health insurance.

"Blue Cross' rate hike proposals would have knocked untold numbers of families into the ranks of the uninsured," said Cox. "Instead, today is a victory for families who are struggling to afford access to health care."

BCBSM originally requested the rate hikes in a January 2009 filing with the Michigan Office of Financial and Insurance Regulation (OFIR).  In that filing, BCBSM requested average rate hikes of 56% for Non-group rates (individuals who buy their own insurance) and 41% for Group Conversion (those moving from an employer-based plan to buying their own). 

In testimony given during the rate hearing, independent experts retained by OFIR estimated that BCBSM could win rates as high as 54% for Non-group rates and 37% for Group Conversion in the hearing process.

However, Attorney General Cox intervened in the case and contested BCBSM's rate hike requests.   Cox argued BCBSM should have taken other steps to reduce the need for rate increases, such as using its surplus.  As a result of the Attorney General's intervention, BCBSM agreed to reduce its Non-group rate request by 34%, down to 22%.  BCBSM also agreed to reduce its Group Conversion rate increase by 19%, also down to 22%, with a total savings of $160 million for approximately 163,000 Michigan citizens.  Additionally, the rates will not take effect until October 1, instead of BCBSM's original request for a June 1 start. 

No agreement, however, was reached on Medigap rates, which affect more than 210,000 Michigan seniors.  Blue Cross is seeking a 31% increase, which would raise a senior's average annual rate by $383.  Cox announced he will continue to fight that rate hike request before OFIR, and also opposes the interim rate hike request currently pending.  The next scheduled hearing date is September 14, 2009.

Cox noted that his ability to achieve these savings for Michigan consumers would not have been possible if legislation he opposed last year was enacted.  In fact, if similar legislation before the House of Representatives this year becomes law, the Attorney General's office would be left powerless to achieve the savings announced today and increases of $308 million dollars would be possible (a 75% rate hike for Non-group and a 64% rate hike for Group Conversion subscribers).

The following chart explains BCBSM's proposed rate hikes, the levels at which OFIR's independent expert recommended, and the result of Cox's negotiations with BCBSM.

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