Blue Cross gets increase in 'Medigap' premiums

December 27, 1990|By Peter H. Frank

Blue Cross and Blue Shield of Maryland Inc. received approval yesterday to boost premiums by an average 5 percent for policies that supplement the coverage provided by Medicare.

The increase represented only a partial victory for the state's largest health insurer, however, since Blue Cross had asked regulators to approve an average 13 percent rate increase when it applied for new rates in late November.

The state Insurance Division said its decision to cut the requested premium increase would result in an additional $4.3 million a year for the Blue Cross plans rather than the $11 million the company requested. The rate increases, which become effective Tuesday, will affect about 105,000 Marylanders.

"The rate adjustments are necessary to maintain benefit levels currently available through our four Medicare supplemental policies," Linda Benedict, vice president of Blue Cross' Individual Market Division, said in a prepared statement. "We believe the rates filed with the State Insurance Division equitably reflect the cost of the benefits provided, and we are concerned with the level of rate adjustments approved."

Blue Cross asked for the higher rates to help offset an increase in the deductible the federal program will charge recipients next year.

The Insurance Division reduced the proposed rate increase for three of the four programs that Blue Cross sells to those enrolled in "Medigap" plans and Over-65 policies:

* The company's Choice Plan would increase 2.9 percent under the insurance division's decision rather than the 11.4 percent that Blue Cross requested.

* The Standard Plan would increase 2.4 percent rather than 10.5 percent.

* The Premium Plan, which is not available to new subscribers, would increase 11.9 percent rather than 21 percent.

* The insurance division approved the full 21 percent increase for the Blue Cross Basic Plan, which has about 1,800 subscribers.

About 90 percent of the 105,000 people covered by the plans are enrolled in either the Choice or Standard programs.

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