BCBSM's Agreement To Hold Rates Constant Until 2016 Provides Little Protection For Michiganders And Is Politically Convenient.
At the initial press conference announcing his support for the Blue Cross Blue Shield of Michigan mutual conversion, Governor Snyder dismissed questions about the BCBSM Medigap plans by stating that BCBSM will honor its current agreement with Michigan and will hold BCBSM Legacy Medigap rates constant until 2016. However, this creates more questions than answers:
- Will Michiganders still be able to enroll in BCBSM until 2016 regardless of medical condition or age?
- Will BCBSM continue its unilateral decision to deny enrollment into BCBSM Legacy Plans for individuals who have access to retirement plans, a spouse's insurance plan, or receive financial support from a former employer to pay Medicare insurance premiums?
- In 2016, what will happen? Will BCBSM Legacy plans go away? Will individuals on BCBSM Legacy plans face premium increases of around $1,000 year? Will individuals on BCBSM Legacy plans suddenly have to pay higher premiums based on his or her age? Will tens of thousands of seniors be forced on to inferior Medicare Advantage plans because they can no longer afford Medigap premiums?
Indeed, the 2011 agreement to hold Medigap rates constant until 2016 was a politically convenient move by BCBSM to give Michigan politicians protection from the consequences of voting for the BCBSM conversion. The elections in 2010 saw millions of dollars spent against politicians for allegedly 'cutting Medicare.' The current legislation truly is cutting Medicare for Michiganders. Yet Governor Snyder's last election for governor is 2014 -- two years before the BCBSM Legacy increase will occur. Furthermore, because of legislative term limits, many state representatives and state senators will be term limited and prevented from running for further elections by then.
The agreement was made in exchange for the Michigan Attorney General not contesting BCBSM's partial acquisition of a Medicaid managed care plan in Pennsylvania. BCBSM planned to invest $215 million in the acquisition and subsequent expansion according to Crain's Detroit Business. Meanwhile, the agreement to hold BCBSM Medigap prices constant for five years itself cost BCBSM approximately $876 million itself -- four times more than the acquisition investment. [1]
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- Will Michiganders still be able to enroll in BCBSM until 2016 regardless of medical condition or age?
- Will BCBSM continue its unilateral decision to deny enrollment into BCBSM Legacy Plans for individuals who have access to retirement plans, a spouse's insurance plan, or receive financial support from a former employer to pay Medicare insurance premiums?
- In 2016, what will happen? Will BCBSM Legacy plans go away? Will individuals on BCBSM Legacy plans face premium increases of around $1,000 year? Will individuals on BCBSM Legacy plans suddenly have to pay higher premiums based on his or her age? Will tens of thousands of seniors be forced on to inferior Medicare Advantage plans because they can no longer afford Medigap premiums?
Indeed, the 2011 agreement to hold Medigap rates constant until 2016 was a politically convenient move by BCBSM to give Michigan politicians protection from the consequences of voting for the BCBSM conversion. The elections in 2010 saw millions of dollars spent against politicians for allegedly 'cutting Medicare.' The current legislation truly is cutting Medicare for Michiganders. Yet Governor Snyder's last election for governor is 2014 -- two years before the BCBSM Legacy increase will occur. Furthermore, because of legislative term limits, many state representatives and state senators will be term limited and prevented from running for further elections by then.
The agreement was made in exchange for the Michigan Attorney General not contesting BCBSM's partial acquisition of a Medicaid managed care plan in Pennsylvania. BCBSM planned to invest $215 million in the acquisition and subsequent expansion according to Crain's Detroit Business. Meanwhile, the agreement to hold BCBSM Medigap prices constant for five years itself cost BCBSM approximately $876 million itself -- four times more than the acquisition investment. [1]
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[1] 200,000 (estimate of number of individuals with BCBSM Legacy plans) * $73 (estimated BCBSM subsidy for these plans) * 5 years * 12 months in a year = $876 million. The 200,000 plan holders and the $73 subsidy are from the September 27, 2012, press release from Michigan Attorney General Bill Schuette, Schuette Calls for Protection for Seniors, Michigan's Most Vulnerable as Legislature Considers Blue Cross Conversion.