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It is no secret that times are tough in Michigan. The state has the highest unemployment rate in the country which has forced thousands of people to purchase individual health insurance plans that were once employer-sponsored. As if Michigan residents haven’t suffered enough from the recessionary state of the economy, Blue Cross Blue Shield of Michigan is attempting to make things worse.

On January 30, 2009, the company filed a rate of increase request with the Michigan Office of Insurance and Regulation to hike monthly premiums of over 400,000 Michigan residents who are on individual policy plans. The request outlines increases of 31% to 56%, depending on the type of policy. The increase only affects those residents who have an individual plan or who have supplemental Medicare coverage – in other words, the increase is going to disproportionately raise the rates of those people who are already struggling.

BCBS claims the increase is necessary to offset a projected $1 billion loss from 2009 to 2011. According to a statement posted on the BCBS website, the losses are due to a failed and outdated regulatory system which places the burden on BCBS of insuring the costliest individuals. In addition to increasing rates, the company plans to cut 1,000 employees throughout 2009 and has placed a freeze on executive and non-union worker salaries.

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