Blue Cross Seeks Immediate 44% Rate Hike

Blue Cross Blue Shield of Michigan has asked the state to let it immediately raise rates for 400,000 people. The state government of Michigan is reviewing Blue Cross' request.

Blue Cross Blue Shield of Michigan has asked the state to let it immediately raise rates for 400,000 people who buy their own health insurance outside the workplace.

But the insurer said that it doesn't need -- at least immediately -- the full rate hike it is seeking for its nongroup and group conversion policies bought by non-elderly people without workplace coverage.

Supplemental Medicare policies for senior citizens, however, which are one of the insurer's biggest money-losing products, still need to be as much as Blue Cross is seeking, Blue Cross said in a letter sent Wednesday to Ken Ross, director of the Office of Financial and Insurance Regulation.

The state is reviewing Blue Cross' request for an immediate rate hike.

If granted, monthly premiums for non-group policyholders immediately would increase 44.4%, compared with the 56% Blue Cross eventually wants for those plans.

Interim rate hikes Blue Cross seeks for group conversion policies that extend coverage people once had in a workplace would be 27.8%; the full rate hike pending calls for a 39.2% increase in those plans.

Seniors with Supplemental Medicare, or so-called Medigap coverage, would increase 31.2%.

"Blue Cross attempts to have our premiums reflect the actual cost of health care for our individual members," said Robert Kasperek, vice president of regulatory affairs for Blue Cross, in a statement explaining why the insurer wants immediate relief, but less than what it originally projected.

"Because health care costs are lower than expected, we can ask for interim rates for some of our individual products that are lower than those we have requested. In the short term, this provides a little relief to consumers."

In a statement, John Sellek, deputy director of communications for Attorney General Mike Cox, who has challenged the rate hikes, said: "Any way you look at it, these are huge rate increases on people who are already struggling to buy insurance."

A hearing on the original rate hikes sought by Blue Cross began this week. A decision by an administrative law judge is expected by Oct. 1.

Blue Cross has said it needs the rate hikes because it faces losses of more than $1 billion through 2011 on its individual policies. It wants state changes to require more commercial insurers to take all applicants, as it is required, to spread the burden of providing insurance to the sickest, costliest people.

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