BlueCross BlueShield of Massachusetts Hopes To Raise Medigap Premiums 12%-20%

In filings Aug. 5, BlueCross BlueShield of Massachusetts, the state's largest insurer, disclosed that it is seeking to raise premiums 12% to 20% next year for its Medigap plans, which cover costs not paid for by traditional Medicare, the Boston Globe reports. Under the proposed hikes, which must be approved by the state Division of Insurance, monthly premiums for the Medex Bronze program, which covers the 20% of hospital costs not paid for by Medicare, will rise 11.9% to $139. Monthly premiums for the Medex Gold program, which includes prescription drug coverage, will increase 20% to $498 (Barnard, Boston Globe, 8/6). Monthly premiums for Medex Core, the most basic plan, will be 16% higher at $84.16 (Heldt Powell, Boston Herald, 8/6). For the previous five years, BlueCross has kept premium increases for its Medigap plans under 10% per year. However, Peter Meade, BlueCross' executive vice president, said that increasing health care costs, particularly prescription drug costs, are prompting the larger increase this year, the Globe reports (Boston Globe, 8/6). "The cost of our members' benefits has continued to rise significantly every year," Meade said, adding, "Our goal is to have our Medex plans break even and remain financially sound" (Boston Herald, 8/6). BlueCross officials said they expect to lose $20 million this year on senior programs, with 66% of the losses on Medex programs, the Globe reports. Medex Gold has 35,000 members, and Medex Bronze has 115,000 members, many of whom also are enrolled in the state's prescription drug assistance program (Boston Globe, 8/6). BlueCross plans to offer an alternative Medigap plan, called Medex Core Plus, which would cost $156.85 per month and would cover all generic drugs and up to $150 a quarter to cover brand-name treatments. "Some people who have a limited drug need will find that the Core Plus product will work for them,'' Meade said. If approved by the state Division of Insurance, the new Medigap rates will go into effect March 15.

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"This 20% rate hike is just another reminder that Congress needs to come up with a Medicare Part D that would make Medex Gold obsolete or more affordable," Al Norman, executive director of Mass Home Care, said (Boston Herald, 8/6). Jack Boesen, executive director of the Massachusetts Senior Action Council, said that the outlook for seniors who require prescription medications "is bleak" because the Medicare drug benefit being debated in Congress would provide "only modest benefits to many seniors," the Globe reports. Meade said, "If [lawmakers] come up with a real prescription program, then there may not be a need for any of these supplemental programs." As a temporary solution until a Medicare drug benefit is passed, BlueCross is setting aside $2 million per year in 2004 and 2005 to help low-income seniors already enrolled in Medex Gold. The program will be open to seniors whose annual income is 200% of the federal poverty level or less: $17,960 for an individual and $24,620 for a couple. However, the maximum financial assistance benefit will be $600 per year, while premium increases will be about $1,200 a year, the Globe reports (Boston Globe, 8/6).