Michigan attorney general tries to block Blues' rate hikes

Michigan's attorney general has taken another swing at Blue Cross Blue Shield of Michigan, announcing his opposition to the insurers' most recent requested rate hikes.

Attorney General Michael Cox notified the plan he has requested hearings over the proposed rate hikes for its non-group health insurance plans, Michigan Blues spokeswoman Helen Stojic said in a telephone interview.

In a May 21 news release announcing his opposition to an increase in medigap premiums, one of the company's three lines of non-group policies, Cox said, "Blue Cross should stop putting profits over people and focus on its mission as the insurer of last resort."

Stojic called the hearing request "part of the process."

"We do not like to be in the position of asking for rate increases," she wrote in an e-mailed statement. "Unfortunately, our broken regulatory system puts us in this uncomfortable position."

The company has long complained that it is at a disadvantage in the individual market and lobbied unsuccessfully last year for regulatory changes it said would level the playing field. Cox publicly opposed that legislation.

In January the Michigan Blues announced it would lay off as many as 1,000 employees in 2009 and that it would propose steep rate increases on non-group policies:

• An average 56% on individual policies.
• An average 42% on group conversion coverage.
• An average 31% on medigap policies.

Premiums for all three types of coverage went up by an average of around 20% in 2007, but those were the first rate increases since 1998, Stojic said. In March the company reported a loss of $144.9 million for 2008, including $133.2 million in losses on its individual policies.

The Michigan State Medical Society hasn't taken a formal position on the proposed rate increases, spokesman David Fox said. "In general we oppose them, mainly because it translates into fewer people with insurance."