Durham, N.C. – Blue Cross and Blue Shield of North Carolina (Blue Cross NC) announced today it requested an overall average rate decrease of 5.2 percent for 2020 Affordable Care Act (ACA) plans offered to individuals, and an average rate decrease of 3.3 percent for ACA plans offered to small businesses with one to 50 employees. The decreases are supported by the company’s industry-leading move to value-based provider reimbursement and progress on reducing internal operating expenses. The rate decreases mean a $238 million reduction in health care costs for 2020.
“We want to be a national model for health care transformation, where insurers and providers are jointly responsibly for delivering better, simpler, more affordable care,” said Patrick Conway, President and CEO of Blue Cross NC. “The hard work is not done, and we must continue building on these successes if we are going to truly make health care affordable for everyone in North Carolina. What these rate reductions show is that the move to value is working – when the focus is on quality and accountability, costs go down and the customer wins.”
In January, Blue Cross NC launched Blue Premier with five major health systems. Blue Premier is a value-based model of care in which Blue Cross NC and the contracted health systems are jointly responsible for the total cost and quality of care for a specific patient population. Blue Cross NC is also providing more resources and data to independent primary care practices so they can participate in value-based care models.
Blue Cross NC has also gained substantial insights about its ACA customers over the six years it has participated in the marketplace. This information has allowed the company to better coordinate care for these customers and reduce the medical expenses for the care they require.
Rates have also stabilized because of the state legislature’s and regulators’ willingness not to add additional health insurance mandates and regulatory burdens that drive costs up for individuals and small business.
This is the second year in a row that Blue Cross NC has filed an average rate decrease for individual ACA members. The company’s average rate reduction for individual members has totaled nearly 10 percent over the last two years.
Blue Cross NC’s average rate filing for its 1-50 small business customers has been zero percent or lower for seven of the last eight quarters.
Blue Cross NC serves more than 435,000 individual ACA members and has more than 8,500 small business ACA customers representing nearly 70,000 members. Blue Cross NC, once again, expects to be the only ACA insurer to offer individual plans in all 100 counties in 2020.
As always, rates vary based on location, age, subsidy amount, and plan. Federal tax credits known as premium subsides are still available for customers with household incomes between 100 and 400 percent of the Federal Poverty Level. About 90 percent of Blue Cross NC current customers with individual ACA plans qualify this year. Subsidies vary by plan and household income.
Individual premiums will be available in October. Open enrollment begins on November 1, 2019 and ends on December 15, 2019.
The rate decreases filed must be approved by the North Carolina Department of Insurance (NCDOI). For competitive reasons, Blue Cross NC is not releasing specific regional pricing information at this time. Blue Cross NC will make more detailed rate information public after NCDOI approves all ACA rates – which we expect to be in late August.
Blue Cross NC will continue offering renewal of transitional plans in 2020. These are plans purchased between March 2010, when the ACA was signed, and October 2013 when regulations went into effect. Transitional plans do not meet ACA requirements but are allowed by federal law. The plans cannot be sold to new customers.