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MI tells Blue Cross to extend deadline for residency rule

The Detroit News, August 17, 2011

A state agency, after receiving complaints, said Tuesday it is giving seniors with Medigap Blue Cross Blue Shield of Michigan policies more time to verify their Michigan residency, to keep a discounted rate. In late June, state Insurance Commissioner R. Kevin Clinton approved a 9% rate increase for Blues customers with Medicare supplemental policies and the elimination of a Medigap subsidy for thousands of people who live outside Michigan. That resulted in a nearly 75% hike for those customers. Rates went up Aug. 1, with most in-state residents now paying $121 a month and out-of-state customers $194.53. The Blues sent notices July 1 to about 8,900 subscribers it believed lived out of state, based on public records, and gave them 30 days to verify Michigan residency to continue receiving a discounted rate, said Helen Stojic, a Blues spokeswoman. The Blues has 216,000 Medigap subscribers. The Michigan Office of Financial and Insurance Regulation has received more than 20 complaints and inquiries about the process and determined a significant number of subscribers were incorrectly sent the information.