Blue Cross Blue Shield of Michigan agreed to restrict how high it raises rates on individuals after months of negotiations with the state's insurance department and attorney general.
The rate increase will be slashed by up to 60 percent after Attorney General Bill Schuette and the Office of Financial and Insurance Regulation negotiated a rate reduction with the insurer. Blue Cross originally requested increases of 10.9 percent to 21.3 percent, depending on the type of policy, according to Legal Newsline.
Now, the increases will range from 7 percent to 9.3 percent. And they are effective April 1, reports the Detroit News.
The rate hikes do not affect seniors with Blue Cross Medicare policies. A separate 12.5 percent average rate hike for seniors with Blues Medigap policies is pending, notes the Detroit Free Press.
Former Attorney General Mike Cox challenged the proposed rate increase covering about 4 percent of the insurer's customer base in September. Blue Cross sought the rate increase last May because it said it is losing money on individual coverage policies.
"When we originally filed for these rates, we asked for rates far below what we needed to break even," Blues spokeswoman Helen Stojic said in a statement. "We will continue to experience financial losses in these products even with the increase announced today. We are sensitive to the impact on our members and are trying to strike a delicate balance between doing the right thing for our business and our members."
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