Blue Cross Blue Shield of Michigan, Michigan Attorney General and Michigan Office of Financial and Insurance Regulation Near Agreement on Rate Increases on Under Age 65 Individua...( DETROIT Aug. 6 /-...),Health

DETROIT, Aug. 6 /PRNewswire/ -- Attorneys from Blue Cross Blue Shield of Michigan (BCBSM), the Michigan Attorney General and the Office of Financial and Insurance Regulation are near an agreement that would conclude the Attorney General's and Office of Financial and Insurance Regulation's challenge over rate increases proposed by BCBSM for its under age 65 nongroup and group conversion products.

Hearings on BCBSM's request to increase rates on its Medicare Supplemental coverage will continue, probably into at least December 2009. The Medicare Supplemental products are not affected by the agreement announced today. BCBSM members covered by employers or groups are not affected by the change.

The tentative agreement with the Attorney General and OFIR would allow BCBSM to raise premiums in individual products designed for purchase by individuals under age 65 by an average of 22 percent. Some products will receive higher-than-average increases, while others will see smaller increases. BCBSM sought to increase rates earlier this year in response to losses of more than $133 million in 2008 on its policies purchased by individuals not covered by employers. State law requires BCBSM product lines to be "self-sustaining over time."

BCBSM's individual product losses are driven by a growing number of people seeking their own coverage and a broken regulatory system that requires BCBSM to cover all individuals rejected by other health insurers for expensive, pre-existing conditions. Another problem with the regulatory system is the amount of time it takes for rates to be determined in BCBSM's uniquely complicated rate-setting process.

A critical factor in BCBSM individual product losses is the higher underlying medical cost that occurs due to cherry-picking by other health care companies operating in the broken regulatory system. BCBSM insures older, l
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