John Franchini, superintendent of New Mexico's Insurance Division, has denied a rate increase request from Blue Cross Blue Shield that would have affected an estimated 27,000 policyholders, many of them self-employed.

Franchini said he denied the 9.9 percent rate increase late last week, making the decision "with the assistance of our actuary and consulting actuaries."

The rate increase would have affected about 10 "closed block" plans, which don't accept new policyholders. As the size of the group in the plan decreases, the costs of medical care are divided among fewer people.

The same group had to pay a rate increase approved last year, which ranged from 18 percent to 25 percent for each policyholder. This would have been at least the second rate increase for those policyholders in a year.

Franchini said he denied the request because "we felt like the company didn't support the medical trend in their rate request."

Blue Cross Blue Shield had sent a letter to policyholders in August saying their rates would increase Nov. 1, in part because of increased medical costs. Actuary Tom Bowling initially approved the increase, but Franchini told him to hold off until he had a chance to review the filing. Blue Cross Blue Shield was supposed to send notifications to the policyholders that the first letter was a mistake. Several policyholders say they never received such letters or a call telling them the rate increase had not yet been approved.

The insurance superintendent currently decides rate requests. After January, under a new law, his decisions can be appealed to the state Public Regulation Commission.

The new law also requires the Insurance Division to have a website listing all rate filings. Many recent rate filings are already on the site, but not the Blue Cross Blue Shield rate case. Franchini said his staff is trying to get all the rate cases on the website by a January deadline.

"Wow," said Ed Oppenheimer, a Blue Cross Blue Shield policyholder who would have been affected by the increase. "I'm very thankful that someone has had the sense to put a brake on this because this is not a good time [for a rate increase]. I'm amazed."

Blue Cross Blue Shield New Mexico did not respond to a request for comment.

Contact Staci Matlock at 986-3055 or smatlock@sfnewmexican.com.