LANSING (AP) -- Blue Cross Blue Shield of Michigan should be allowed to raise rates nearly 4 percent on its Medicare supplemental policies, less than the "excessive" 31 percent increase initially requested by the insurer, an independent hearing officer said Friday.
Musette Michael's recommendation was forwarded to the state insurance commissioner, who is expected to make a final decision in December.
Both the state attorney general's office and the Michigan Office of Financial and Insurance Regulation fought Blue Cross' "Medigap" rate proposal during hearings. About 210,000 Michigan residents buy supplemental Medicare coverage from Blue Cross.
"This is absolutely great news for Michigan seniors who are often unable to absorb increased costs because they live on fixed incomes," Attorney General Mike Cox said in a statement. His spokesman said while Blue Cross first sought a 31 percent rate hike, it more recently asked for a nearly 37 percent increase.
Blue Cross spokeswoman Helen Stojic said the rate-setting process will continue. She was concerned with the hearing officer's interpretation of how a 1 percent Medigap subsidy the health insurer pays should be calculated.
"We will continue to advocate for a subsidy structure with the insurance commissioner that works effectively in providing for the long-term sustainability of affordable coverage for seniors," Stojic said.
The federal Medicare program insures people age 65 or older or who are disabled. Seniors can buy supplemental Medigap coverage to help cover deductibles and other costs.
Cox said the current Medigap Plan C costs $107 a month. It would cost $39 more a month under Blue Cross' proposal, he said. Instead, if insurance commissioner Ken Ross adopts the recommendation issued Friday, the plan would cost $4 more a month, according to Cox's office.
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