DEPT OF LABOR AND ECONOMIC GROWTH: OFIR Commissioner Disapproves BCBSM Nongroup Rate Hike

FROM THE DEPT OF LABOR AND ECONOMIC GROWTH

July 11, 2008

Contact: Jason Moon 517-335-1700


LANSING – Today Office of Financial and Insurance Regulation (OFIR) Commissioner Ken Ross issued a final decision in Blue Cross Blue Shield of Michigan’s (BCBSM) proposed rate changes for its nongroup category of business.  Under the authority of Public Act 350 of 1980, Commissioner Ross’s decision disapproves BCBSM’s rate increase of 24.3% and orders BCBSM to recalculate final rates for its nongroup products.  

In the final decision, the Commissioner also:

 

·         Cut the permissible trend allowance for administrative expenses in half  

·         Increased the investment income credit used to offset the need for rate increases  

·         Denied additional rate increases requested by BCBSM based upon delays in the rate-making process  

“This decision reduces the rate increase request,” said Ross. “In tight economic times, every little bit helps.”

  In October, 2006, BCBSM filed proposed rate changes for its nongroup category of business.  A subscriber filed a request for hearing in March, 2007 and the Commissioner issued an Order for Hearing and Appointment of Independent Hearing Officer (IHO).  The IHO issued a proposal for decision (PFD), a recommendation to the Commissioner, on May 14, 2008.  Both the subscriber and BCBSM filed timely objections to the PFD.  Today’s decision is OFIR’s final action in the matter.

  BCBSM and the subscriber may appeal the order in Circuit Court within 60 days.

  A copy of the final decision and the Independent Hearing Officer’s proposal for decision and its exhibits are attached.