Posted: September 23rd, 2016 | By: Richard Craver
Professor Mark Hall is quoted in the following story, “Blue Cross to provide exchange plans in all N.C. counties in 2017,” written by Richard Craver and originally published in the Winston-Salem Journal on Sept. 23, 2016.
Blue Cross and Blue Shield of North Carolina on Thursday committed to offering federal health marketplace exchange plans in all 100 counties after gaining N.C. Department of Insurance approval for revising its rates that are likely to be higher.
Blue Cross will again be the only health insurer to offer marketplace plans statewide. An estimated 613,000 North Carolinians are projected to buy insurance from the federal exchange — the fourth highest amount in the country. Blue Cross projects gaining 266,000 new enrollees in 2017.
It appears Cigna Healthcare of North Carolina will provide plans only in the Triangle area and Alamance County, but the insurer has not confirmed that.
Insurers have until today to tell the U.S. Centers for Medicare and Medicaid Services which plans they will offer on the 2017 exchange. Plan enrollees typically receive a federal tax credit to subsidize their monthly premium cost.
North Carolinians may not know which plans Blue Cross and Cigna will offer until the state insurance department releases that information on Oct. 28 — just four days before the 2017 sign-up period begins Nov. 1. The period ends Dec. 31.
“We cannot release rate information for BCBSNC because federal regulation requires we release information on final rates on a uniform basis for all insurers,” said Colin Day, an assistant director of public information for the insurance department. “We are still reviewing off-exchange insurers’ rate filings and not in a place to release final information.”
Brad Wilson, the chief executive and president of Blue Cross, said in a blog post that its current marketplace-exchange customers will receive their rate notices in the mail by the end of October.
Wilson said the insurer considered its Affordable Care Act-related losses in making the decision to stay in every county.
It reported on Feb. 26 that it lost $600 million on ACA-related patient care when not including federal reimbursements and $282 million when including them. In 2014, the insurer lost $452 million when not including federal reimbursements and $123 million when including them.
Following the news that Aetna and United Healthcare would depart North Carolina for the 2017 exchange, Blue Cross reopened rate negotiations with state insurance officials in August. Department officials could not be reached for immediate comment for details about the reopened negotiations.
Wilson did not say how much the approved revised rates were changed.
On May 31, Blue Cross submitted a request to the department for an average increase of 18.8 percent in monthly premium-plan costs for 2017. The range of increase is 9.4 percent to 28 percent, depending primarily on benefit plan chosen, the age of the individual and where they live.
The increase does not affect people on employer or small-group plans. Three of the plan levels — silver, gold and platinum — qualify for a federal subsidy.
“In order to prevent premiums from increasing further in 2017, we’ve made necessary changes to plans and benefits,” Wilson said.
Those include dropping the platinum-plan option because of low demand; having more data about the exchange population “that allows us to adequately price our ACA products”; adequate rate increases; and adjustments to pharmacy and network changes.
“We have adjusted our rate filing for 2017 to account for the influx of new customers and their medical needs,” Wilson said.
Mark Hall, a law professor at Wake Forest University and a nationally renowned health-care expert, said he is “optimistic that Blue Cross will be able to succeed in this market for the longer term.”
“The exit of several competitors will result in increased enrollment, and it appears that they have received the rate increases they need to avoid losing money.”
The announcement from Blue Cross confirms projections from the Kaiser Family Foundation that most North Carolinians will have just one insurer’s plans to choose from for 2017.
The foundation projected 21,700 enrollees in Forsyth County and 101,800 in the 14 counties that comprise the Triad and Northwest North Carolina.
Wilson said Blue Cross has “heard from many of you that the cost of premiums remains a top concern when shopping for a subsidized plan.”
“At the same time, we’re learning just how much ACA customers use medical services — and it’s a lot,” he said.
Brian Tajlili, Blue Cross’ director for actuarial and pricing services, said on May 31 that the insurer “continued to see a large number of older and less healthy customers enroll in our individual plans as compared to our other customer groups.”
Kaiser found that North Carolina counties are in the minority nationwide in terms of how many insurers are expected to provide plans.
“We find that most marketplace enrollees will likely continue to have a choice of three or more plans in 2017,” Kaiser said. However, the number of those counties nationwide will shrink from 85 percent to 62 percent.
During a media teleconference in August, officials with the U.S. Department of Health and Human Services stressed the affordability of the exchange plans while downplaying concerns expressed about multiple states, including North Carolina, that could have just one statewide provider. “We are confident that consumers in North Carolina will continue to have affordable options for coverage next year,” HHS press secretary Marjorie Connolly said.
HHS officials estimated that 82 percent of North Carolina’s exchange participants would pay less than $75 a month in 2017 with a subsidy even if double-digit rate increases are approved by the state insurance department. HHS officials said the federal subsidy goes up when premium costs increase.
Advocacy groups have complained that some exchange plans provide essentially just catastrophic coverage. They say a very high deductible discourages individuals from getting care for minor illnesses since they would have to pay the full cost of an office or other medical visit.
Wilson warned that the additional 260,000 enrollees for 2017 could result in “customer service delays during peak times for customers who purchase their own insurance” as Blue Cross hires and trains additional customer-service employees.
Wilson said Blue Cross expects to more than double its customer-services staff as a result.
State insurance officials said on Sept. 15 that Blue Cross has paid a $3.6 million fine to settle an investigation into consumer complaints about double billing and dropped coverage.
The fine is not only the largest the department has ever levied against an insurer, but it is almost double the previous top amount, according to the department.