Blue Cross NC to raise rates up to 24 percent on reinstated health plans

jmurawski@newsobserver.comNovember 19, 2013 

  • BCBS individual plan options in N.C.

    Blue Cross and Blue Shield customers will have several individual health insurance options next year: They will be able to buy 2013 plans, with 2014 markups, or 2014 plans that comply with the Affordable Care Act.

    They can compare prices on a Blue Cross website that lists details for this year’s and next year’s individual plans.

    However, the 2013 plans on the site show this year’s prices and will have to be manually adjusted for 2014 costs. The average increase for Blue Advantage plans will be 16.4 percent; for Blue Value, 22 percent; and for Blue Options HSA, 23.6 percent.

    Blue Cross said the latest round of increases was caused by the rising cost of health care, actuarial adjustments, and by taxes and fees triggered by the health care law.

Blue Cross and Blue Shield of North Carolina said Tuesday that it will raise rates as much as 24 percent on 2013 individual health insurance plans that are being extended next year.

The increase is double the price inflation for the same health plans just a year ago, but many Blue Cross customers who have grumbled about rising costs in past years are cheering the news this time.

The health plans in question were slated for elimination under the Affordable Care Act, the nation’s health care law, but Blue Cross said last week it would offer the plans next year. President Barack Obama urged insurers to extend the individual plans for one year amid a public outcry over forced cancellations and steep price increases for replacement plans.

The N.C. Department of Insurance will review the proposed rates and, if it determines they are too high, it could order Blue Cross to issue refunds to customers. The agency has not set a deadline to review the proposed rates, which go into effect Jan. 1.

“The key thing is – this is one more year,” said Blue Cross spokeswoman Michelle Douglas. “It’s not saying you can keep this plan forever.”

The extension applies only to Blue Cross customers on individual plans who were enrolled on or before Oct. 1. Those who signed up after will lose their plans at the end of this year. However, legislation before Congress would allow all Americans to buy the 2013 plans, not just those who enrolled by the Oct. 1 deadline.

In recent months, Blue Cross had mailed out more than 151,000 plan cancellations, affecting more than 230,000 customers on those individual policies. The letters listed 2014 premiums under new individual plans that comply with the Affordable Care Act. Some customers saw rate decreases, but many were shaken by increases that doubled and tripled their costs.

Insurance Commissioner Wayne Goodwin has said that more than 473,000 people in North Carolina were affected by the cancellations of insurance plans that don’t meet the minimum standards of the new federal health law. So far only Blue Cross has agreed to extend those plans next year.

Kate Walker, for example, saw her monthly Blue Cross premium soar from $98 to $577 for a policy recommended as a replacement to her canceled plan. Walker, 64, said the increase was so steep she was planning to drop coverage altogether until she became eligible for Medicare in August.

“I was going to take my chances because of that much of an increase,” said Walker, a semiretired communications consultant in Pittsboro. “And now, as luck would have it, things have sorted themselves out.”

Walker and other Blue Cross customers will have the option of sticking to the plans they have now, with price increases, or switching to a 2014 plan, depending on which benefits and costs work best for them.

Walker is keeping her current plan, which will likely increase to about $115 a month. “That’s a no-brainer for me,” she said.

The 2014 plans are generally more expensive because they offer more benefits and because next year insurers will not be allowed to turn away applicants with pre-existing conditions.

However, 2014 plans also come with federal subsidies for those whose household incomes fall within a range set by the federal government. Blue Cross officials estimate that about 40 percent of its customers would qualify for a subsidy to offset their insurance costs.

George Schwab of Charlotte is relieved to hear that Blue Cross will allow him to keep his 2013 health plan, even with a premium increase.

“I usually find it goes up 10 to 15 percent (a year),” said Schwab, 62 and retired. “That’s OK. I’ll take it. It gets me one year closer to Medicare.”

Schwab had been outraged by the fivefold increase he was facing before Obama reversed course last week and allowed insurance companies to continue offering individual plans that don’t meet Affordable Care Act provisions.

In September, Schwab and his wife got a notice that Blue Cross was canceling their current $228-a-month policy and suggested a comparable plan for a whopping $1,208 a month.

Douglas, the Blue Cross spokeswoman, noted that some customers will see increases for their 2013 plans exceeding the 16 to 24 percent average. These customers will move up in age categories, say, from age 59 to 60, bumping them up into higher priced plans. Charlotte Observer staff writer Karen Garloch contributed.

Murawski: 919-829-893

News & Observer is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service