University should not be affected by Blue Cross losses, officials say
Blue Cross Blue Shield of Michigan lost $144.9 million in 2008 and wants to raise rates to compensate for those losses.
The company wants to boost rates for individual or non-group coverage by 56 percent and has laid off or frozen 1,000 jobs in the process.
Central Michigan University faculty will not be affected by the increase because CMU is self-insured, meaning it takes on the extra risk, not Blue Cross, said Lori Hella, director of benefits and wellness.
"(CMU) projects how much the claims will be, and if we underestimate, we make up for it," she said.
The increase only affects those who are fully insured by Blue Cross, Hella said. If Blue Cross underestimates the amount needed for claims in a year, it makes up the cost.
Blue Cross is simply the plan administered for the health plan at CMU, Hella said. It pays the claims for CMU and handles development of networks.
If the increase is approved, about 400,000 people who buy their own health insurance through Blue Cross will be affected.
Blue Cross is Michigan's only last resort insurer and provides coverage for 4.7 million people in the state.
Blue Cross's emergency fund remains steady at $2.25 billion in 2008, which dropped from $2.4 billion. That will only cover emergencies for a month and a half, Blue Cross said.
The request filed with the state on Jan. 31 would increase rates for those with group conversion policies that extend former workplace coverage by 42 percent and supplement Medicare policies 31 percent.
Hella does not see this as an issue in the future, because all three situations where the rates will increase include individuals who purchase their own insurance through Blue Cross. CMU does not fall under any of those categories, she said.
"(The loss) is from people who just walk into Blue Cross and purchase their own insurance," Hella said.
-The Associated Press contributed to this report.
metro@cm-life.com
