In what has become an annual event, Blue Cross and Blue Shield of Maryland tomorrow goes before the Maryland Insurance Division to ask for increases of 12 to 19 percent for its Medicare supplement programs that cover 104,000 Marylanders.
The request comes a week after a new federal law went into effect prohibiting insurance companies from turning down people for medical reasons during the first six months after they become eligible for Medicare.
Providing what is commonly known as "medigap" coverage, the policies pay for the deductibles and co-payments that are not covered by Medicare, the government medical program that covers people over the age of 65. About 70 percent of the nation's elderly have medigap policies.
VTC Blue Cross is asking for the increases because of the rising cost of medical services and the mounting frequency of Medicare use, said Linda S. Benedict, vice president and general manager of the individual market division for Blue Cross. Medicare is also expected to increase the first-day hospital deductible from $628 to $654 in January, she said.
Blue Cross has four different types of medigap policies: premium, choice, standard and basic.
The premium policy, which has been closed to new customers for three years, pays all costs not covered by Medicare, including prescription drugs and a lifetime stay in the hospital.
Choice and standard, the two plans that cover 90 percent of the medigap subscribers, offer less coverage than does premium. Neither choice nor standard plans have prescription coverage, and the standard policy does not cover outpatient medical expenses unless it is an emergency, minor surgery, radiation treatment or chemotherapy.
The basic policy has the features of the standard plan, but the subscriber must pay the deductible for a hospital stay.
The requested monthly rate increases for the various plans would be the following:
* Choice: Age 65 to 70, from $54.96 to $65.18, 18.6 percent; Age 70 to 74, from $77.92 to $92.41, 18.6 percent.
* Premium: Age 65 or over, from $182.96 to $218.45, 19.4 #F percent.
* Standard: Age 65 to 70, $29.57 to $33.14, 12.1 percent; Age 70 to 74, from $42.54 to $47.68, 12.1 percent.
* Basic: Age 65 to 70, $15.83 to $18.80, 18.8 percent; Age 70 to 74, from $22.59 to $26.83, 18.8 percent.
Benedict said the requested increases are low compared with rate increases of 20 percent or more that are being requested by other insurers. "They are very low, low, low increases," she said.
One reason the Blue Cross increases are as high as they are is because the non-profit insurer got so little a year ago. At that time Blue Cross asked for an average 13 percent increase, but Insurance Commissioner John A. Donaho granted an increase of only 5 percent.
Since its Medicare supplemental programs are open to all, regardless of their pre-existing medical conditions, Blue Cross is not affected by a new law that took effect Nov. 5.
Under that law, insurance companies cannot refuse to enroll Medicare recipients 65 or older during an "open-enrollment" period that lasts for six months after a person becomes eligible for Medicare. The regulation will be enforced by state insurance agencies.
Groups representing the elderly hailed the law for making medigap coverage more available. "The new open-enrollment guarantees in medigap policies could eventually enable millions of older persons in poor health to get coverage for which they would otherwise not be eligible," said James Firman, president of the United Seniors Health Cooperative, a Washington advocacy group.
Even a trade group for the health insurers say the law will be helpful. "It is a very good thing for the seniors that are affected," said Melanie K. Marsh, manager of consumer affairs for Health Insurance Association of America. But she did not know how many insurance companies had restricted their medigap coverage.
Sidney A. Green, assistant chief actuary for life and health in the Maryland Insurance Division, said most insurance companies operating in the state do not restrict medigap coverage. "I don't think it will be revolutionary," he said, adding that he does not expect insurance companies to raise their rates because of the new law.