Health insurance premiums for nearly 200,000 people covered by Blue Cross Blue Shield of Michigan policies would increase an average of 22 percent -- far less than the company originally sought -- under a tentative agreement reached Thursday.
The deal reached between Attorney General Mike Cox and Blue Cross would cover the company's so-called non-group and group conversion policies. Those policies typically are bought by people under 65 who aren't covered by employer-based or government plans.
The tentative agreement must be approved by state regulators. It was not clear late Thursday how quickly regulators would act.
Earlier this year, Blue Cross requested rate increases averaging 42 percent to 56 percent for the policies, saying they were money-losers and dragging down the nonprofit's bottom line. Cox challenged that proposal and state regulators set up rate hearings that would end if Thursday's deal is approved.
Rate increase hearings will continue for Blue Cross' Medicare supplemental or "Medigap" policies, which are not covered by the tentative agreement.
Cox, a Republican who is running for governor in 2010, called the deal "a victory for families who are struggling to afford access to health care." Cox said Blue Cross rates would have wound up far higher if he had not intervened.
Blue Cross would be allowed to raise monthly premiums by an average of $47 for individuals in non-group policies, Cox's office said, compared to the original request of $122 per month.
The rate increases would take effect Oct. 1.
Blue Cross says Michigan has a "broken regulatory system" and is seeking changes to state law guiding the insurance market. Blue Cross, which can't turn away customers willing to pay for health coverage, says it often gets saddled with expensive patients who have been rejected by for-profit companies.
"Because of financial losses and the prospect of a lengthy rate-setting process, we determined new rates were needed sooner rather than later," Blue Cross spokesman Andrew Hetzel said in a statement.