Blue Cross and Blue Shield of North Carolina has no interest in participating in the partisan crossfire over what has come to be known as Obamacare. We are focused on our customers – customers we’re proud to have served for the past 80 years. And right now, our customers are confused and anxious about how the Affordable Care Act affects them.
That’s why we think it’s time to have an honest conversation about how the ACA will affect our customers’ health insurance premiums and the other causes that are driving up our health care costs.
When the ACA was enacted in March 2010, a key provision required insurers to offer plans that complied with the ACA only after Jan. 1, 2014. At that time, we were not allowed to renew our customers’ existing plans due to restrictions of the ACA. Recently, President Obama issued an order allowing the individual policies that would have been canceled to extend for one more year.
We moved immediately to reinstate as many of those individual policies as we could. We filed necessary documents with the N.C. Department of Insurance to allow most of our individual customers whose policies were scheduled to be canceled to keep their current plans for another year.
The NCDOI understood the need to move quickly for North Carolinians and approved our giving these approximately 230,000 customers an additional option to consider in 2014.
Even though our customers get to keep their old plans, many are still looking at a premium increase, although perhaps one not as significant as what they might see under a new 2014 ACA plan. These premium increases are due in large part to two cost factors that all policyholders face: the ACA and medical costs.
It’s critical for individual policyholders to understand that although they will have their existing policies extended, they won’t get a reprieve from the taxes, fees and new insurance requirements imposed by the ACA, as well as from rising medical costs.
Here’s why: First, the ACA imposes multiple new taxes and fees, some of which will be applied to existing plans as they extend through 2014. Second, medical costs will soon make up 20 percent of the U.S. Gross Domestic Product. Things like unhealthy lifestyles, an inefficient health care system and overpriced drugs and technology waste more than $750 billion a year in medical costs. This waste pushes our customers’ premium costs higher.
In the end, the taxes and fees associated with the ACA, plus ever rising medical costs, drive up premiums whether customers get coverage through the government exchange or on the open market.
As a company, we’ve been focused on finding ways to rein in costs for our customers. Nearly 87 cents out of every premium dollar we receive goes to pay a doctor, hospital or other provider of medical care.
We’ve worked to reduce our own administrative costs by improving our processes and becoming more efficient. We’ve sought out partnerships that provide better quality care to our customers. We’re the only health insurer in North Carolina that has made its plans available on the exchange for residents of all 100 counties – something the national for-profit carriers have refused to do.
When necessary, we fight on behalf of our customers to remove waste from the system. For example, last fall we took doctors, hospitals and imaging centers to court to eliminate their ability to charge our customers twice for imaging services they receive once. Since then, the NCDOI ruled that our customers don’t have to pay repeatedly when providers file duplicate charges for imaging scans, which has saved our customers more than $30 million to date.
The ACA has some good goals, but these goals come at a cost. Medical costs will continue to rise. As responsible citizens, we must all become more aware of what drives up these costs. We have to make informed decisions and favor treatments that are proven to work over the ones that are expensive and untested. And each of us must insist on transparency when it comes to how much medical care actually costs because, in the end, these costs come out of our customers’ pockets.
Regardless of what happens in Washington, BCBSNC will fight relentlessly to hold down medical costs, empower our customers and provide the best coverage we can to North Carolinians in all 100 counties.
Brad Wilson is president and CEO of BCBSNC.