- Requested base increase for Blue Advantage: 6.35 percent
- Consumer Driven Health Plans account for 45 percent of new BCBSNC individual plan sales so far in 2011
- Customers to receive notice of their individual rate increase in mid October
- Low medical trend on HSA/Saver products drives zero percent increase
CHAPEL HILL, N.C. – Today Blue Cross and Blue Shield of North Carolina (BCBSNC) filed a rate request with the North Carolina Department of Insurance (DOI) for a rate increase of zero percent for Blue Options HSASM and Blue SaverSM. The requested rate increase for Blue Advantage® is 6.35 percent. Blue Advantage and Blue Options HSA currently serve more than 347,000 customers under the age of 65.
“The zero percent base rate increase for the Blue Options HSA and Blue Saver products underscores that when customers have a greater financial stake in the decisions they make, they become more savvy health care consumers,” said BCBSNC Chief Actuary Patrick Getzen. “The growth we are seeing in these products shows that consumers are comfortable taking a more active role in managing their health care expenses, and they are embracing the value these plans provide.”
One example is emergency room use by Blue Options HSA members (who pay for ER visits out of pocket) compared to Blue Advantage members (who pay a co-pay for ER visits.) Customers with HSA plans make one-third fewer ER visits than Blue Advantage customers, and when they do go to the ER, it is for more serious conditions.
If approved by the Department of Insurance, more than 294,000 Blue Advantage/Blue Options HSA members would see rate changes less than 10 percent, including more than 17,000 customers who would see rate decreases.
The Blue Advantage PPO is BCBSNC’s traditional co-pay-based health plan for individuals. Blue Options HSA and Blue Saver are high-deductible plans that offer customers lower monthly premiums and more streamlined benefits. Blue Options HSA is paired with a Health Savings Account, which customers use to pay their out of pocket expenses. Blue Options HSA and Blue Saver products cover preventive care at 100 percent with no cost sharing. “Sick” visits, specialist visits and visits to urgent care centers or emergency rooms are all subject to customers’ coinsurance and deductible.
Cost, use of services drive premiums
“The cost and use of medical services are primary factors that drive rates,” said CFO Gerald Petkau. “The rate of growth in usage has slowed due to the economy, but the cost of services continues to rise. When customers return to more typical utilization patterns, we’ll see health care costs increase more rapidly once again. That’s a major concern.”
Other factors that impact premiums include administrative costs, taxes and a contribution to the reserves BCBSNC is required by law to maintain.
Any premium changes to Blue Advantage and Blue Options HSA/Blue Saver products must be approved by the DOI. Following DOI approval, Blue Advantage and Blue Options HSA/Blue Saver customers will receive a letter from BCBSNC in October telling them what their specific rate changes will be for 2012. Customers may choose to make changes to their health plan, deductible, co-pay or co-insurance to reduce their premium.
Consumer Driven Health Plans fastest growing
Blue Options HSA is BCBSNC’s fastest growing health plan, with year over year membership growth of 23 percent.
Raleigh business owner Matthew May is one BCBSNC customer who has become an HSA fan. When May left his previous employer in 2007 to open his own cabinetry business, he researched his health plan options and felt that Blue Options HSA was the right choice for his family of six.
He chose a Blue Options HSA Plan with a $5,450 deductible. That meant that he would pay for his family’s first $5,450 in medical expenses with pre-tax funds from his HSA. After that, BCBSNC coverage would kick in and cover 100 percent of his costs.
Just three months into his new plan, May’s teenage son was diagnosed with Leukemia.
“That was pretty devastating. But for the past three years, I’ve paid my $5,450 deductible, and Blue Cross has paid the rest,” May said. “If I had been on a more traditional health insurance plan, I’d still be writing checks to the hospital every month.”
About Blue Cross and Blue Shield of North Carolina:
Blue Cross and Blue Shield of North Carolina is a leader in delivering innovative health care products, services and information to more than 3.7 million members, including approximately 900,000 served on behalf of other Blue Plans. For 77 years, the company has served its customers by offering health insurance at a competitive price and has served the people of North Carolina through support of community organizations, programs and events that promote good health. Blue Cross and Blue Shield of North Carolina is an independent licensee of the Blue Cross and Blue Shield Association. Access BCBSNC online at bcbsnc.com.