Blue Cross proposal protects Michigan’s most vulnerable seniors, while giving all seniors deep discounts on Medigap coverage

Blue Cross proposal protects Michigan’s most vulnerable seniors, while giving all seniors deep discounts on Medigap coverage

Blue Cross Blue Shield of Michigan filed a proposal with our regulators today that would provide Michigan seniors with monthly discounts of $48, $64, $75 or $96 off the full price of our most popular Medicare Supplemental insurance plan, also known as Medigap.

Medigap is optional insurance that pays for many of the out-of-pocket costs that are charged when seniors visit the doctor or hospital.

The annual dollar value of the BCBSM Medigap discounts would be $576, $768, $900 or $1,152. The variations are based on seniors’ income – with those who have the lowest income getting the biggest discount on their health care.

BCBSM is the only insurer in Michigan that provides a discounted Medigap product. BCBSM is assessed 1% of our total revenue by the state every year to fund the discounts. This assessment totaled more than $180 million in 2009.

Providing discounts based on income is a change from how discounts are applied today. Currently, discounts offered by BCBSM are applied evenly across our Medigap subscriber base. Seniors who earn six-figure incomes receive the same break on their Medigap policies as do low-income seniors who depend on Meals on Wheels for the nutrition they need to remain independent.

With the cost of health care rising, BCBSM is concerned about some low-income seniors not being able to afford Medigap – even with the hefty discount we provide.

In fact, under this new approach, low-income seniors would receive a $16 monthly reduction in their Medigap premium. Almost nowhere in the nation are health insurance premiums going down. We can make it possible by realigning our discounts to give a greater share to the lowest-income.

When you squeeze the balloon like that, you reduce the discounts provided to the middle- and upper-income seniors. This has the affect of increasing their monthly premiums.

But we believe that Michigan will support providing a little extra help to poor seniors – and we ask our Medigap members for their support as well. If you are enrolled in our Medigap Plan C and earn between $32,000 and $85,000 a year, your premium will be about $15 a month higher. That’s about 50 cents a day that you are investing in keeping health care within reach for someone your age that is getting by on less than $16,245 a year. And, your overall discount will still be significant – $64 every month, or $768 a year.

BCBSM will continue to provide deep discounts to all Michigan seniors who independently enroll in our Medigap plans. We are asking for your support to provide a little extra help to those seniors who need it most.

– Andrew Hetzel BCBSM Vice President, Corporate Communications

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