December 7, 2009

LANSING - Attorney General Mike Cox today praised a final ruling by the state insurance commissioner's office that slashes Blue Cross' proposed rate increases for Medigap insurance from 36.7% down to only 3.8%, saving about 200,000 Michigan seniors $86 million in the first year alone.  The Attorney General's office had intervened in the case after Blue Cross proposed the outrageous increase earlier this year. 

"This is great news for Michigan seniors who are often on fixed incomes and unable to absorb higher costs," said Cox.  "This is another example of why it is so important for the legislature to protect the powers of the Attorney General's office to question Blue Cross insurance rate hikes."

While Blue Cross requested a 31% increase for Medigap seniors earlier this year, it recently increased that request to 36.7%.  The Attorney General's office intervened in the case and argued Blue Cross should not raise rates because it was failing to meet its statutory obligation to subsidize seniors' insurance costs for Medigap policies.  A preliminary decision by an administrative law judge at the Michigan Office of Financial and Insurance Regulation against the huge proposed increase was issued on November 3^rd and adopted by the Insurance Commissioner today.  In the final order, the commissioner agreed with the Attorney General's argument, saying Blue Cross must subsidize Medigap rates by a full $182 million. 

As an example of the cost savings, the current Medigap Plan C monthly rate of $107.09 would have increased by $39.30 per month to $146.39.  Instead, under today's final order, there will be a rate increase of only $4.07 per month, resulting in a savings of $35.23 per month. 

Today's ruling marks the end of the rate hearing.  Any party to the rate case has 60 days to seek an appeal of the Insurance Commissioner's final order.  Any appeal would be heard by an Ingham County Circuit Judge.  

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