Montgomery County sentinel. [volume] (Rockville, Md.) 1855-1974, 1958-01-02
In Maryland -
Blue Cross Files
For 22% Rate Hike

Maryland Hospital Service, Inc (Blue Crosse
has filed an application with the State Depart
ment of Insurance requesting approval of an
increase in the subscription rates for its standard
hospital care plan.
The requested rate adjustments involve an
average increase of approximately % percent
over the present rates Under the group plan
the new rate for an individual would be $3.50 per
month compared with the present rate of S21O
per month. For family, the monthly rate would
be increased from $3.50 to $780, For the non
group and direct pay subscribers, the new rates,
on a quarterly basis, would be $500 for an ind
Wdual and $21.60 for family, as compared with
present rates of $3.50 and $17.70 respectively
Present subscription rates were established
on May 1, 1856 Income from these rates was
estimated to be adequate to meet hospital care
costs, operating expenses and necessary reserves,
for two-year period. For the year 1885, the
Plans total income was $19,657, 947. Payments
for hospital care amounted to $17,972471, which
was 9O.4 percent of total income. Operating ex-
penses were SIS percent of income leaving an
addition to reserves of Al percent compared with
the percent figure set by the State Insurance
Department.. For the first months of 1857,
payments for hospital care were $16,03 100 or
942 percent of total income in that period; oper-
ating expenses were 81 percent leaving less than
l percent for addition to reserves.
According to r. H. Dabney, Blue Cross Di-
rector it is anticipated that total Plan operations
Will be on about breakeven basis for the full
year 1857, with additions to reserves and
probably small loss. 1t is expected that sub
stantial losses will be incurred in the early
months of 1858, with a resulting drain on reserves
AS of December 81 1856, the Plans contin-
gency reserves totalled $5,022,060, equivalent to
S522 per subscriber and to 3.24 months of average
nj A. on
reserves totalled $5052,928 equivalent to S504
per subscriber and to only 291 months of average
hospital care expenses. The Plans reserve posi-
ton has declined steadily in recent years as its
membership and expenses for hospital care have
increased. BY comparison contingency reserves
as of December 81, 1913 were equivalent to $500
per subscriber and 951 months of average hos
pital care expense; at the end of 1854 the cores
ponding figures were $5.37 per subscriber and
800 months OF average hospital care expenses.
The principal reason for the requested in
crease in subscription rates is the continuing rise
in the cost of hospital care. In 1852, payments
to hospitals averaged $1,000 per day of inpatient
care The average payment in 1856 was $2213 per
day. and for the first nine months of 1857 it
averaged $3.50 per day. There is every reason
TO believe that per diem payments will continue
70 rise as hospital costs go up in accordance with
the overall rise in general living expenses
Hospitals are continually improving theft
services, have increased wage levels in an effort
TO Keep pace with community standards, and
have added the facilities, equipment and drugs
demanded by our rapidly advancing medical
sciences. This progress in health care means that
higher rates must be paid by all patients--and,
In turn, means that Blue Cross benefits have
increased in value to the subscriber Blue Cross
provides its basic benefits in terms of actual hos
pital services regardless of cost-not fixed dollar
lndemnites toward the hospital bill This results
In increased benefits to the subscriber since the
value OF what he is receiving goes up with each
rise in hospital expense.
Another factor contributing to the Plans
higher hospital care expenses, but to much
lesser degree than direct hospital costs, has been
the steady rise in number of admissions. In 1852.
the rate of inpatient hospital admissions was
lO4.o per 1000 members per year, the rate in 1856
was ll5O, and through the first nine months of
1897 was at an annual rate of 1177 Part of this
increase has been due to extension of benefits to
new areas of coverage, and part of it has been
the result OF increased usage of hospital facilities
by the general public The admission rate for
Maryland Blue Cross, however remains substan
TALLY below the national average for all Blue
cross Plans; this was 126 per 1000 members per
year in 1852 and 135 in 1856.
Dabney said that no change in rates is
Planned for Blue Shield, the companion program
covering medical and surgical care