Contact:  Jason Moon (517) 335-1700
FOR IMMEDIATE RELEASE
July 18, 2008

LANSING - Today Office of Financial and Insurance Regulation (OFIR) Commissioner Ken Ross approved Blue Cross Blue Shield of Michigan’s (BCBSM) proposed rate changes for its nongroup category of business.  The recalculated rates approved today represent an overall increase of only 15.52% compared to a 24.3% increase that BCBSM had originally sought. Last week, OFIR issued a final decision disapproving BCBSM’s rate filing and ordered the company to recalculate its final rates in conformity of the final decision and to meet the standards for approval in Public Act 350 of 1980. The recalculated rates approved today are effective September 1, 2008.

In the 21 months since BCBSM submitted its overall rate increase request of 24.3%, enrollment in its nongroup products shifted toward products that required more cost sharing on the part of the enrollees. The enrollment shift reduced BCBSM’s overall revenue need in this market. Therefore, in its recalculated rate filing, the rate increase for nongroup enrollees was less than what had been requested in October of 2006. That dynamic, coupled with the reduction ordered by the Commissioner pursuant to the recent rate hearing, reduced the rate increase to 15.52%.  

“A rate increase of 15% is certainly better news than the 24% hike originally proposed,” said Ross.

In October, 2006, BCBSM filed proposed rate changes for its nongroup category of business.  A subscriber filed a request for hearing in March, 2007 and the Commissioner issued an Order for Hearing and Appointment of Independent Hearing Officer (IHO).  The IHO issued a proposal for decision (PFD), a recommendation to the Commissioner, on May 14, 2008.  Both the subscriber and BCBSM filed timely objections to the PFD. On June 11, 2008 the Commissioner issued a final decision disapproving BCBSM’s rate increase of 24.3% and ordered the company to recalculate final rates for its nongroup products.

BCBSM and the subscriber may appeal last week’s final decision in Circuit Court.

To read today’s order approving rates, visit: http://www.michigan.gov/documents/dleg/Comm_Order_nongrouprates_242641_7.pdf

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