Blues' policies for elderly get scrutiny

HEALTH CARE INDUSTRIES

April 19, 1994|By Patricia Meisol | Patricia Meisol,Sun Staff Writer

For state officials overseeing the overall health of Maryland's Blue Cross and Blue Shield plan, the concern has been the insurer's continued losses from accounts it services for others .. because of higher-than-average expenses.

But now the regulators are looking at one place where the insurer is making money: the sale of supplementary insurance products to the elderly.

These policies are aimed at people on Medicare and cover medical costs not picked up by Medicare. Customers can pick among policies offering various degrees of coverage; some cover prescription drugs, for instance.

In 1993, the price of the so-called "Medigap" policies rose an average of 12 percent as the result of a rate increase approved by state regulators. As might be expected, this generated several months of angry letters to the state insurance administration. But regulators felt it was justified, based on information the Blues provided.

Their opinion changed in March, when the health insurer turned in its annual financial filing. It turned out the Blues made a $7 million profit on Medigap policies.

The insurance commissioner, Dwight K. Bartlett, has called a meeting for next month with Blues officials to find out what

happened. What really irks regulators is the insurer's way-off estimate of profits, estimates regulators used to approve the rate increase. The Blues estimated they had earned $100,000 on the policies for the nine months ended Sept. 30.

If state regulators were shocked by the final tally, so, too, was company Chief Executive Officer William L. Jews. He attributed the profit to a decline in medical costs. Regulators are unlikely to rescind the rate increase, but they might not look so favorably on future requests.

Meantime, the Blues continue to lose money on some national accounts, federal employees, and others for whom they pay medical bills. The reason: Expenses are higher than average. There are no plans to boost rates for these groups, however.

Mother's Day card with unusual message

Hallmark designers might cringe, but the University of Maryland Cancer Center is taking its chances on a flowery Mother's Day card with an unusual message:

Treat yourself to a test for breast cancer.

Now available free in the stationery sections of 158 Rite Aid stores in Baltimore, the card starts off with the greeting, "Especially for you on Mother's Day. A gift of love and . . . a gift of life." Inside, it invites the recipient to use the enclosed certificate to obtain a free or reduced-cost ($65) mammogram and "enjoy the satisfaction of knowing that you've taken the time to do something good for yourself."

The university cancer center is offering the tests for breast cancer to women over 40 who have not had one in the past 12 months. The certificates will be honored during May. Rite Aid plans to issue 69,000 of them in Baltimore.

Free tests are for those women who can't afford to pay.

An estimated 3,400 women in Maryland will be diagnosed with breast cancer this year.

The central message of the card, a project of Rite Aid in seven locations nationwide, is that early detection of breast cancer saves lives.

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