The newest health insurance offering from Blue Cross and Blue Shield under the Affordable Care Act will be a lower-cost plan that will limited largely to the Triangle.
Blue Local will be offered only to residents of seven counties: Wake, Johnston, Durham, Chatham, Orange, Person and Caswell.
Blue Cross hasn’t disclosed the cost of the plan, which is still under review by state and federal regulators, but said the monthly premiums will be about 15 percent lower than the most comprehensive health plans the company offers in North Carolina.
When the costs are finalized, Blue Local will be sold on the federal exchange at healthcare.gov and available as of Jan. 1. Blue Local is an individual plan that must be purchased directly or through an insurance agent, but not through an employer.
The key to offering a lower cost plan is the increasingly popular “narrow network.” In in the case of Blue Local, customers will be limited to using Durham-based Duke Medicine, which includes Duke Raleigh and Duke Regional hospitals, and WakeMed Key Community Care, which includes 380 doctors and Raleigh-based WakeMed Health & Hospitals.
Excluded will be facilities owned by Chapel Hill-based UNC Hospitals, including Raleigh-based Rex Healthcare, and doctors employed by those organizations.
Narrow networks are a common way for insurance companies to keep down costs. Insurers can manage costs by negotiating lower reimbursement rates with providers in exchange for steering a higher volume of patients to those providers.
Blue Cross is offering Blue Local to attract customers with cheaper rates at a time the company is seeking an average rate increase of 25.7 percent for its North Carolina health plans under the Affordable Care Act.
UnitedHealthCare and Coventry Health Care of the Carolinas also offer narrow network plans in North Carolina, as do insurers around the country.
Blue Cross, the state’s largest insurer, has has always offered limited network plans under the Affordable Care Act. Its Blue Value plan is limited to UNC in the Triangle, and limited to Novant Health in the Charlotte area, but the Novant network is open to Triangle residents and the UNC network is open to Charlotte residents.
Its Blue Local in the Charlotte area is limited to the Carolinas HealthCare System. However, Charlotte residents on Blue Local do not get Duke and WakeMed in their network, and Triangle residents on Blue Local do not get Carolinas HealthCare System as part of their network.
David Smith, an insurance broker at Ebenconcepts in Raleigh, said the Triangle and Charlotte areas are the only regions with a high enough population to justify their own narrow network health plans.
Customers in these narrow network plans are charged a hefty cost if they use providers outside their proscribed network. For example if the deductible is $6,850 in the narrow network, it’s twice that amount outside the network, and any amount paid toward a deductible within the network doesn’t count toward the deductible outside the network – in effect creating two parallel deductible accounts.
The out of pocket maximum caps are also separate within and outside the network.
Still, despite the restrictions – and potential hidden costs for the unwary – these plans are popular with people grasping at any means to control their health care expenses, as evidenced by the 15,561 people who have signed up for the Charlotte version of Blue Local in its first year.