Most consumers buying health insurance on the North Carolina version of the federal exchange will face a 24.3 percent increase in monthly premiums in 2017, Blue Cross Blue Shield of N.C. confirmed Friday.
Brian Tajlili, the insurer’s director of actuarial and pricing services, disclosed the price increase in a blog post. The rate increase does not affect people on employer or small-group plans.
On May 31, Blue Cross submitted a request to the N.C. Insurance Department for an average increase of 18.8 percent in monthly premium-plan rates for 2017.
At that average rate, the range of increase was 9.4 percent to 28 percent, depending primarily on benefit plan chosen, the age of the individual and where they live.
The insurer now says the range of increase is 12 percent to 27 percent. Brad Wilson, Blue Cross’ chief executive and president, said current marketplace-exchange customers will receive their rate notices in the mail before the 2017 sign-up period begins Nov. 1. The period ends Dec. 31.
Four of the plan levels — bronze, silver, gold and platinum — qualify for a federal subsidy.
Blue Cross will again be the only insurer to offer marketplace plans statewide.
Tajlili said about 90 percent of exchange participants will likely qualify for a subsidy in 2017.
“When you account for the subsidy, about 72 percent of our ACA customers who enroll through www.Healthcare.gov will pay less than or the same next year as they’re paying in 2016,” Tajlili said.
“For those who qualify, the subsidy lowers the amount they pay out of pocket, but it does not reduce the overall cost of health insurance.”
More than 600,000 buyers expected
An estimated 613,000 North Carolinians are projected to buy insurance from the exchange — the fourth highest number in the country. Blue Cross projects gaining 260,000 new enrollees in 2017.
The Kaiser Family Foundation projects 21,700 enrollees in Forsyth County and 101,800 in the 14 counties that comprise the Triad and Northwest N.C.
Following the news that Aetna and United Healthcare would depart N.C. for the 2017 exchange, Blue Cross reopened rate negotiations with state insurance officials in August. The insurer confirmed Sept. 22 its commitment to offering exchange plans in all 100 counties after gaining insurance department approval for revising its rates.
It appears Cigna Healthcare of N.C. will provide plans only in the Triangle area and Alamance County, but the insurer has not confirmed that.
North Carolinians may not know which plans Blue Cross and Cigna will offer until the insurance department releases that information Oct. 28.
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 service staff as a result.
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.
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.”
HHS stresses affordability
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.
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.
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