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