Michigan Blue Cross Deal Freezes Medigap Rates

LANSING (AP) – Blue Cross Blue Shield of Michigan and Attorney General Bill Schuette say they’ve agreed to keep rates stable for seniors who buy supplemental health coverage from the insurer.

The deal announced Thursday affects so-called “Medigap” policies bought to supplement Medicare coverage. Schuette says the agreement freezes rates until August 2016.

It’s part of an agreement that allows Michigan Blue Cross and Philadelphia-based Independence Blue Cross to acquire a stake in AmeriHealth Mercy. The company has Medicaid managed-care contracts in states including Pennsylvania, Indiana, and South Carolina.

The joint venture could provide an opportunity for Blues insurers nationwide to expand into Medicaid coverage just as states are seeking ways to save money in the program and the ranks of Medicaid enrollees is poised to grow.

© Copyright 2011 The Associated Press. All Rights Reserved. This material may not be published, broadcast rewritten or redistributed.


One Comment

  1. Heather says:

    Being a medigap broker, I’m not sure how BC can do this. Each year Medicare (generally) increases their deductibles for Part A and Part B. Your medigap plan has to change each year to reflect these changes in deductibles.
    I would be interested in what BC will be getting out of this deal. I’m not sure if they will have to spread that cost to their other products. Also, if it is frozen for 5 years, when the 5 years is up, expect some big increases in medigap premiums. I guess if they are on the mid to high end price wise, holding premiums level may not really matter.
    NC Medicare Supplements

    1. Insurance Guy says:

      Our BCBS of MI is a not for profit corporation and that being said BCBS of MI along with our state attorney general uses that fact to take advantage of the other BCBS of MI policy holders, and this has been going on for years, and it is a shame or should I call it a sham.

      Our state has and continues to take from one segment of the society to give to another. I think at one time we were called the welfare state. If I were a person or an employer and was looking for a place to start a new life or relocate, I would cross MI off my list.

      The BCBS of MI Medigap policy has been underpriced for years. BCBS of MI charges an additional fee to their group policy holders to make up the short fall. I think it is between 1 and 2 percent, however, I assume 99.999999% of the people don’t know about that. Plus starting in January the state has a new 1% medical claims tax to help off set the Medicaid funding short fall.

      Per the article it looks like BCBSM cost shifted $220 million last year alone, I wonder what that will look like in the following years.

      I hear BCBS of MI radio ads all of the time, and they tout all the good things they do since they are a not for profit organization and have to accept everyone blah blah blah.

      Where does all this money come from? It comes from their policy holders that have been left holding the bag. Isn’t that nice.

      That’s Michigan for ya

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