We at Blue Cross and Blue Shield of North Carolina are staying in the Affordable Care Act for 2017 and will again offer coverage in all 100 North Carolina counties. This is an important commitment that we believe, as the state’s largest health insurer, we must make for the people and businesses in North Carolina.
If we did not, at best a fraction of people across the state would have options for health insurance through the federal exchange. That’s something we certainly want to avoid.
But the decision was not as easy as that. More health insurance companies are losing money on the ACA. Some are no longer offering policies sold on the exchange. And fewer people across the nation have enrolled than what the federal government expected.
In deciding to stay in, we first took a hard look at trends in North Carolina and across the country. Some 600,000 North Carolinians got their coverage through the ACA this year. These are folks who might not otherwise have been able to purchase a health plan before the implementation of the ACA – most of whom would not have insurance going forward if we had decided not to offer ACA plans for 2017.
More people with coverage is a good thing. But it came with a host of challenges.
ACA customers have turned out to be unhealthier than anticipated, and they are heavy users of medical services. At the same time, not enough healthy customers have signed up to balance the cost. The result: Health insurers have experienced extensive financial losses on their ACA business. We lost more than $400 million on our ACA business in 2014 and 2015.
The good news is that we have more data and information about this group of people, and we have been able to adjust our rates each year to better serve them and ensure that we are not operating at a loss. In 2017, we believe that we have priced our policies at a rate that will cover our customers and our business.
The second factor we assessed was Aetna’s abrupt and disappointing announcement that it will exit the ACA market in North Carolina. That followed a similar decision by UnitedHealthcare. Aetna’s sudden withdrawal forces us to reassess our projected numbers and determine how we can service the estimated 260,000 North Carolinians who will have to buy replacement ACA coverage this year, with insufficient time to line up resources.
We have been working around the clock to prepare for these new customers. We have developed additional online resources to help anticipate your questions and provide answers during this time. We’ve increased our phone line capacity and the number of customer service professionals trained to help when issues arise. And we are better prepared to manage expectations throughout this enrollment period. When there are issues and long hold times, we will let people know.
But make no mistake, the influx of an estimated 260,000 customers coming to us from Aetna and UnitedHealthcare is going to strain our ability to meet our own standards for service. We simply don’t have more time to make additional preparations. Some customers may experience delays as we work through higher-than-anticipated service volumes.
Finally, we considered our commitment to serve North Carolina and to improve the health and well-being of our customers and communities. We live this commitment every day. And we are committed to our customers, new and old.
If we left for 2017, North Carolina would have virtually no options for consumers on the exchange. For 2017, we believe we can balance the needs of our customers as a whole against our state’s interest in ensuring that residents in every county have an option to buy coverage on the exchange, including the 600,000 who have already come to rely upon it. The risk of not meeting our highest service standards is worth it in order to give people a chance to be insured.
But our commitment to serve the state cannot subordinate our obligation to our customers to be financially stable for the long term – which cannot occur if large financial losses continue despite having raised premiums. And, even if future losses are able to be avoided by charging higher premiums, repeated substantial increases each year would lead to an unsustainable market with unaffordable prices and a shrinking number of purchasers.
Next year, we will start the decision process over for 2018. Each year that we participate, we learn a little more about what’s working, what is not and what can make the ACA sustainable.
This is our home, too, and it’s important that we do all we can to ensure our family, friends and neighbors have access to the coverage they need. The ACA is the means by which uninsured Americans have access to coverage. Let’s keep up this achievement by making it sustainable.
Brad Wilson is president and chief executive officer of Blue Cross and Blue Shield of North Carolina.