Friday, August 07, 2015

Carolina Blues

The largest insurer in North Carolina (BCBS) is asking for a 34.6% average rate increase on their business sold in the individual ACA compliant marketplace. Consumers who have Grandmothered plans will not be affected (Gee, I wonder why?)

This final request for increase comes after an initial request of 25.7% they submitted in June. Why did they change their request and why did it come so late? The answer is, initial requests were due in June but reinsurance payments weren't made available until late July. BCBS expected to receive a large chuck of financial assistance from the reinsurance funds. What they received was less than expected. The result was total losses of $466 million offset by reinsurance payments of $343 million for a net loss of $123 million. 

Another reason for the change is concern for continued high claims. Now that companies have access to actual claims data they are finding that the enrolled population is sicker and older than projected. Many believed that demand for health care services would decline after 2014. This isn't the case according to Patrick Getzen, BCBS chief actuary: “We actually expected pent-up demand to level off in 2015, but that didn’t happen.”

As if huge rate increases weren't enough, Blue Cross said it’s also eliminating several plans across the state. Beginning in January they will no longer offer Blue Advantage and Blue Select plans. Of course these are the plans that offer the broadest networks of doctors and hospitals.

If you like your plan you can keep it. We will lower an average family's insurance premiums by $2500. If you like your doctors you can keep them.

Except if you live in North Carolina and have an Obamacare compliant plan. In your case chances are you're screwed.
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