LANSING, Mich. (Legal Newsline) - A preliminary ruling by the Michigan Insurance Commissioner's that slashes proposed rate increases for Blue Cross Medigap insurance has been praised by state Attorney General Mike Cox.

The proposed rate increases would be cut from 36.7-percent down to only 3.8-percent. The cut would save about 200,000 Michigan seniors $85 million in the first year alone.

"This is absolutely great news for Michigan seniors who are often unable to absorb increased costs because they live on fixed incomes," Cox said.

"If Blue Cross had its way in the Legislature last year, my office would have been powerless to block this huge rate increase request."

Blue Cross had requested a 31-percent increase for Medigap seniors earlier in the year. It then increased that request to 36.7-percent. The attorney general's office then intervened in the case, arguing that Blue Cross should not raise rates because it was failing to meet its statutory obligation to subsidize seniors' insurance costs.

The recently announced preliminary decision by an administrative law judge at the Michigan Office of Financial and Insurance Regulation agreed with the Attorney General's argument and said that Blue Cross must subsidize Medigap rates by a full $181 million.

The preliminary ruling marks the concluding phase of the rate hearing. The Attorney General's Office and Blue Cross have until Nov. 20 to file objections to the preliminary ruling. A final ruling is expected around Dec. 4.

Under Blue Cross' proposed rate increase, the current Medigap Plan C monthly rate of $107.09 would have increased $39.30 to $146.39. Under the recent preliminary decision, the rate increase would be only $4.07 per month, a savings of $35.23 per month.