The cost of health insurance will rise by an average 12.8 percent for 105,000 Medicare beneficiaries who have supplemental policies with Blue Cross and Blue Shield of Maryland.
Four programs under the company's Medigap and Over-65 policies will increase between 8.4 percent and 15.4 percent beginning Jan. 1.
While the rate increase will provide an estimated $9.5 million in additional revenue for Blue Cross next year, the new rates fell roughly 23 percent below levels requested by the company, according to figures provided by the industry's regulator,the Maryland Insurance Division.
It was the second year in a row that regulators approved sharply lower rate increases than those requested by Blue Cross, the state's largest health insurer. The company had asked for rates next year that would have amounted to $12.4 million in added revenue.
"I am extremely concerned about any additional burden placed on our elderly citizens who depend largely on fixed incomes," state Insurance Commissioner John A. Donaho said in explaining the rates that were approved yesterday. He said he "cut substantially" from the increases requested for administrative costs, federal income taxes and a reserve to protect against unexpected losses.
Blue Cross, however, repeated its position that the original rate increase was justified. "Naturally, we are concerned about the lower level of rates approved by the state Insurance Division," Linda Benedict, vicepresident of Blue Cross, said in a statement.
The rate increases that were requested and approved were:
* Choice Plan: requested 18.6 percent; approved 14.6 percent.
* Standard Plan: requested 12.1 percent; approved 8.4 percent.
* Premium Plan: requested 19.4 percent; approved 15.4 percent.
L * Basic Plan: requested 18.8 percent; approved 14.8 percent.