August 13, 2009
LANSING- Attorney
General Mike Cox today announced that as a result of his opposition to Blue
Cross Blue Shield of Michigan's (BCBSM) interim rate increase request for
Medigap insurance purchased by seniors, state regulators allowed only a 4.7%
rate increase -- 26.5% lower than the 31.2% increase Blue Cross requested.
"Today is a
huge win for Michigan seniors, who are often unable to afford increased costs
due to their fixed incomes," said Cox. "This victory reaffirms the vital role
the Attorney General's office plays in protecting consumers from unjustifiably
high health insurance price increases."
After filing
for a 31.2% increase in Medigap policy rates for more than 200,000 seniors
earlier this year, BCBSM also requested an interim rate increase of 31.2% on
June 17. Cox intervened in both the original and interim rate increase cases,
arguing that BCBSM could avoid the rate increases by using other financial
resources, such as its surplus.
In its
decision today on the interim increase request, the Office of Financial and
Insurance Regulation (OFIR) ruled that BCBSM should use other resources, such as
its surplus, and denied the interim 31.2% increase. Instead, OFIR allowed only
a 4.7% interim increase, saving seniors at least $30 million.
By agreeing
with the Attorney General's argument in the interim case, it is very possible
that the same argument will hold true in the on going original rate increase
request case. The next hearing regarding that case is scheduled for September
14th.
Cox also said
he was pleased that OFIR formally approved last week's reduction in other BCBSM
rate increases, which will save families who buy their own health insurance $160
million.
Mary Ablan,
Executive Director of the Area Agencies on Aging Association of Michigan,
praised today's results.
"This
decision is a major breakthrough in keeping Medicare supplemental policies more
affordable in Michigan. Thank goodness the Attorney General and OFIR
Commissioner are looking out for seniors!"
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