A half-million North Carolina customers who buy individual health insurance from Blue Cross and Blue Shield will pay an average rate increase of 14.1 percent starting in January, the company said Tuesday.
The new rates were approved last month by the N.C. Department of Insurance for Blue Cross individual health insurance purchased under the Affordable Care Act. Blue Cross, the state’s largest health insurer, insures 502,000 people in North Carolina under the ACA.
Pricing details on individual health insurance plans won’t be available until Nov. 1, the beginning of open enrollment for the ACA. Across the state Blue Cross customers will see 2018 rates range from a decrease of 0.6 percent to an increase of 23.4 percent, which comes to a 14.1 percent average statewide. Triangle customers will see increases very near the statewide average, with a similar range, said Blue Cross spokesman Austin Vevurka.
Blue Cross customers are receiving notifications by mail with a price quote for a plan that includes their in-network doctors and has similar benefits to their current coverage. The increases can exceed the stated maximum range in cases where a customer moves into a higher age group, based on 5-year increments.
“It’s important to note that these increases are before the effects of member aging,” Vevurka said. “So some people might get a higher increase if they’re moving into the next age band.”
But about 50,000 Blue Cross customers who are on “grandfathered” plans purchased before 2010 will pay even steeper rate increases. “Grandfathered” plans were less comprehensive and less expensive than ACA plans, and Blue Cross is eliminating them at the end of this year. These customers can expect to see health insurance costs double or triple in January.
Thomas Craney, a money manager in the Outer Banks, and his wife received a letter from Blue Cross suggesting a replacement ACA plan that offers the closest coverage to what the couple currently have. On an annual basis, the couple, who have had Blue Cross insurance since about 2002, would see their premiums go from about $15,000 to about $35,000. Once deductibles and other out-of-pocket costs are factored in, their annual health insurance cost will increase from nearly $21,000 to nearly $50,000.
“Who can afford that?” Craney said. “It’s like putting a kid through college.”
Kevin Martin of Franklinton is also seeing an increase. His family’s pre-ACA plan’s premiums will go from $9,828 a year to $18,852 under an ACA policy. The couple’s deductible would increase by another $1,250 a year. Martin and his wife purchased the policy in 2009 when it cost $300 a month, or $3,600 a year.
“I was hoping to retire before I’m 70,” said Martin, a self-employed environmental consultant. “But that’s $10,000 a year I can’t put in my retirement account.”
However, many on ACA policies who are subject to the 14.1 percent statewide average increase will not have to pay the full cost because more than 90 percent of those insured through the ACA in North Carolina qualify for a federal subsidy called an advanced premium tax credit. The subsidy is available to customers whose household incomes fall between 100 percent and 400 percent of the federal poverty level.
The premium subsidies are also available to Blue Cross customers who are transitioning from “grandfathered” plans to ACA plans. Martin and Craney, however, said their household incomes are too high to qualify for subsidies. Still, Blue Cross customers on “grandfathered” plans are not obligated to buy the policies Blue Cross recommends in their mailed notices; they can look for cheaper options with Blue Cross, which sells individual plans in all 100 North Carolina counties, or with Cigna, which operates in five Triangle counties.
Cigna earlier this year requested a 31.9 percent average rate increase in the state; the N.C. Department of Insurance has not yet said if that rate was approved. Cigna and Blue Cross are the only two companies offering individual health insurance in North Carolina in 2018. Most people in the state buy insurance through their employers or through the federal programs Medicaid or Medicare.
Blue Cross also said that it had anticipated the Trump administration would eliminate another subsidy, called a cost-sharing reduction, which requires insurers to discount their plans for low-income customers. If not for that, Blue Cross officials said its ACA rate increase would have been close to zero for 2018, not 14.1 percent.
Trump issued an executive order last week eliminating the subsidies. This week, senators reached a deal to fund the subsidies for two years, but there is no guarantee that a bill will be voted on in the Senate. Any such measure would need to be approved by Congress.
About two-thirds of North Carolina’s ACA customers qualify for the cost-sharing reduction subsidy; it’s available to those with household incomes between 100 percent and 250 percent of the federal poverty level.