If Michigan lawmakers approve a proposal to transition the state's Blue Cross Blue Shield plan to a nonprofit mutual insurance company it could "shaft" members with the insurer's Medigap coverage, Attorney General Bill Schuette said before the state House Insurance Committee.
Bills approved last month in the Michigan Senate, which would allow Blue Cross to become a mutualized company fail to adequately ensure that the insurer will continue providing Medigap plans, reported Michigan Radio.
"As we consider proposals to change how Blue Cross is structured in Michigan, we must do all we can to ensure Michigan seniors don't get shafted in the process," Schuette said. "Looming on the horizon is a senior cliff, which would cause skyrocketing Medigap rate increases for Michigan's most vulnerable -- senior citizens. That is unacceptable. I am confident all parties involved want to fix this problem."
He said seniors with a Blue Cross Medigap plan could see their premiums rise by 66 percent if the insurer relinquishes its tax-exempt status to compete on a level playing field against its market competitors, according to the Detroit Free Press.
Although the bills allocate 60 percent of Blue Cross's annual donations to Medigap coverage for about five years, they don't require the insurer to subsidize Medigap plans beyond 2021, the Detroit News reported. "By that time you're in the gorge," Schuette told reporters.
Blue Cross's vice president of governmental affairs Mark Cook disagreed with the attorney general, testifying at the meeting that its senior members will have alternative options in the future, including its Medicare Advantage plans, the Free Press noted.