State regulators today awarded Blue Cross and Blue Shield of Maryland rate increases ranging from 8.4 to l5.4 percent in premiums paid by approximately 105,000 Medicare policyholders. The new rates take effect Jan. 1.
The Maryland Insurance Division approved the rate increase following a hearing earlier this month at which opponents complained that health insurance costs were already cutting too deeply into their fixed incomes.
The adjustments affect those residents who are enrolled in so-called medigap programs, which include standard, choice, basic and premium coverage. Most are over 65 or disabled.
Medigap programs are designed to pay the difference between what standard medical insurance must pay and what must be paid by the individual policy holder.
Blue Cross officials had originally asked for rate increases ranging from 12.1 to 19.4 percent.
"Naturally, we are concerned about the lower level of rates approved by the state insurance division," said Linda Benedict, a vice president at Blue Cross and Blue Shield. "We will continue to monitor these programs."
Benedict defended the original rates requested by Blue Cross as "equitable" in light of an increase in customer usage of the program and changes in federal Medicare coverage that will increase what the insurer must pay for hospital visits.
Insurance Commissioner John A. Donaho could not be reached for comment today.
Earlier this month, he said described the problem in setting rates as a conflict between protecting the solvency of the insurer versus increasing the cost of insurance to the elderly.
"We have to be concerned with both," he said.
For the standard and choice programs, which are held by 90 percent of medigap customers, Blue Cross requested rate increases of 12.1 and 18.6 percent respectively, but were granted increases of 8.4 and 14.6 percent.
Blue Cross requested increases of 19.4 percent for premium coverage and 18.8 percent for basic coverage, but were granted increases of 15.4 percent and 14.8 percent respectively.