OFIR Orders BCBSM to Extend Residency Verification Period for Medigap Subscribers

Under settlement agreement, out-of-state Medigap customers receive a 75 percent increase compared to nine percent for seniors living in Michigan

FOR IMMEDIATE RELEASE
August 16, 2011
Contact: Jason Moon 517-335-1700
http://twitter.com/miofir

LANSING - Office of Financial and Insurance Regulation (OFIR) Commissioner Kevin Clinton has ordered Blue Cross Blue Shield of Michigan (BCBSM) to extend the time period from 30 to 90 days for Medigap subscribers to verify their Michigan residency.

On June 28, 2011, Clinton approved an agreement between Michigan Attorney General Bill Schuette, OFIR staff, a policyholder and BCBSM regarding BCBSM’s request to raise rates on its Medigap products. BCBSM had originally sought a composite 21.7 percent increase, but the parties agreed to an across the board 9.05 percent increase for 200,000 Medigap subscribers. Clinton also approved the parties’ recommendation that he remove BCBSM’s Medigap subsidy from the rates of out-of-state subscribers. The removal of the subsidy increases the rates for subscribers living outside of Michigan by 75 percent.  

On July 1, 2011, BCBSM notified the Medigap customers it had determined do not live in Michigan that they had until July 31, 2011 to provide documentation of their Michigan residency. BCBSM defines an out-of-state resident as anyone living outside of Michigan for more than six months of the year.

Through consumer complaints and discussions with BCBSM, OFIR discovered that a significant number of in-state Medigap subscribers were incorrectly sent this notification.

“The subsidy provides significant savings to BCBSM’s Medigap subscribers and is preserved for in-state customers,” Clinton said. “Seniors should be given ample time to prove they live in Michigan.”   

The order also stipulated that OFIR staff review and approve BCBSM’s determinations regarding the elimination of the Medigap subsidy for out-of-state subscribers.

If Michigan consumers believe they have incorrectly received BCBSM’s residency verification letter and have unsuccessfully appealed to BCBSM, they should contact OFIR toll-free at 877-999-6442.

To view a copy of OFIR’s order, visit: http://www.michigan.gov/documents/lara/8_12_11-_Supp_Order_360844_7.pdf

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