Blue Cross and Blue Shield of North Carolina (Blue Cross NC) filed rates with the North Carolina Department of Insurance (NCDOI) for customers who enroll in Affordable Care Act (ACA) plans in 2018, requesting a 22.9 percent average rate increase.
Three factors driving the rate increase:
- CSR funding
- Increase in medical costs including physician services and prescription drugs
- Federal Health Insurance Tax
The lack of funding for cost-sharing reduction (CSR) payments drove the majority of the requested increase. The Blue Cross NC requested increase would have been 8.8 percent if CSR subsidies had been fully funded for 2018.
The CSR subsidies help lower-income ACA customers purchase special plans with lower out-of-pocket costs for medical care. These plans have lower deductibles and copayments -- making doctor visits and prescriptions more affordable. The ACA requires insurers to offer these plans, but without these payments, insurers are responsible for these extra benefits, and the cost is spread through the whole group of ACA customers.
“We’re seeing the market begin to stabilize after three years of coverage,” said Brian Tajlili, director of actuarial and pricing services for Blue Cross NC. “Unfortunately, the lack of CSR funding significantly increases the rates for all ACA customers. We are still required to offer the additional CSR benefits to participate in the Exchange, so covering these costs without CSR funding will drive up our average rate for next year.”
Additionally, the return of the Federal Health Insurance Tax accounts for roughly 3 percent of the total increase.
Blue Cross NC intends to sell health insurance plans on and off the Exchange1 in all 100 North Carolina counties. However, the undecided future of the ACA makes it hard for insurance companies to prepare for 2018, and could impact whether or not Blue Cross NC can offer plans.
“Our filing does not guarantee our participation in offering plans,” added Tajlili. “We’ll keep our customers informed should any changes impact current ACA plans.”
For more information, visit blog.bcbsnc.com.
About Blue Cross and Blue Shield of North Carolina:
Blue Cross NC improves the health and well-being of our customers and communities by providing innovative health care products, services and information to more than 3.8 million members, including approximately 1 million served on behalf of other Blue Plans. The company employs more than 4,900 North Carolinians to serve our members through partnerships with 96 percent of the state’s medical doctors and 99 percent of the state’s acute-care hospitals. Blue Cross NC has been recognized as one of the World’s Most Ethical Companies by Ethisphere Institute every year since 2012. Blue Cross NC is an independent licensee of the Blue Cross and Blue Shield Association. Visit Blue Cross NC online at bcbsnc.com. All other marks are the property of their respective owners.
 The Exchange, or the Health Insurance Marketplace, is an independent entity run by the federal government.