Blue Cross Blue Shield of Michigan and Attorney General Bill Schuette Agree to Keep Medigap Insurance Rates Stable Until 2016

DETROIT, Dec. 1, 2011 /PRNewswire/ -- Blue Cross Blue Shield of Michigan announced an agreement today with Michigan Attorney General Bill Schuette that continues, until at least August 2016, a unique benefit provided by Blue Cross for Michigan's Medicare beneficiaries – deeply discounted premiums for Medicare Supplemental insurance, commonly known as "Medigap."

The discounts reduce the premiums for BCBSM's "Medigap Plan C" by $73 per month from the full rate of $194 per month to the $121 per month that beneficiaries actually pay for their coverage.  The discounts are funded by subsidies collected by BCBSM from Michigan businesses and individuals that purchase Blue Cross health coverage.  These subsidies are mandated by the State of Michigan.

In total, BCBSM and its customers subsidize Medigap premiums by more than $180 million every year. This year, BCBSM projects an underwriting loss on Medigap of about $220 million that includes the subsidy.

"Affordable health coverage for Michigan seniors is something Blue Cross provides, but it comes with a $220 million cost that is paid by our other customers," said Andrew Hetzel, BCBSM vice president for corporate communications.  "Blue Cross is expanding our ability to cover vulnerable people in Michigan, and we look forward not only to serving seniors, but also serving growing numbers of Michiganders receiving health care through Medicaid."

Under the agreement, BCBSM can move forward with an arrangement with Independence Blue Cross to own a minority share of the AmeriHealth Mercy Family of Companies, a top-tier, best-in-class Medicaid managed care organization headquartered in Philadelphia.  The Blues look to expand services to Medicaid beneficiaries in Michigan and nationally through the arrangement.

Blue Cross Blue Shield of Michigan is a nonprofit corporation and independent licensee of the Blue Cross and Blue Shield Association. For more company information, visit bcbsm.com.

SOURCE Blue Cross Blue Shield of Michigan