Blue Cross Blue Shield of Michigan has proposed sizable Medigap rate increases for 2017. Current plan members are a mixture of confused and upset as some face premiums more than twice what they pay now.
In some areas, the changes are small, but in other regions, double-digit percentage increases have been requested. For enrollees who are used to plan stability, they’re left wondering whether to look at Medigap plans from other carriers, or switch to a Medicare Advantage plan.
Currently, a 65-year-old woman and 80-year-old man pay $122.86 per month for Legacy Medigap Plan C. The former can expect to pay about $48 more per month come January 1, and the latter as much as an additional $177 per month!
Why the Medigap rate increases?
Back in 2011, Michigan’s Attorney General Bill Schuette agreed to a five-year rate freeze when Blue Cross acquired a minority interest in AmeriHealth Mercy. That deal is set to expire on December 31 of this year.
Additionally, a separate agreement was made that allowed the Blues to convert into a nonprofit mutual. In return, the state of Michigan agreed to continue more than $200 million in annual Medigap subsidies over the course of two years. That deal also expires on December 31.
Even with the proposed rate increases going into effect for 2017, Blue Cross estimates a 10 percent loss on Medigap business for next year. In the past five years, the carrier has lost $1 billion on Medigap subsidies.
Despite that fact, Blue Cross will still offer Medigap subsidies next year, thanks to the Michigan Health Endowment Fund. Currently, 195,000 participants receive subsidies for Blue Cross Medigap plans through the Michigan Health Endowment Fund. Officials are estimating that only 79,000 enrollees will meet 2017 requirements.
This enrollment season is shaping up to be a year that many enrollees find themselves critically researching and comparing plan options.