Blue Cross NC will no longer offer its grandfathered health plans as of Jan. 1, 2018. That means customers who currently have coverage through a grandfathered plan will need to transition to an Affordable Care Act (ACA) plan with an effective date of Jan. 1, 2018. We know this will be tough news for our customers who love their grandfathered plans. We want to share some information about why our company made this decision and what it means for our customers.
A Hard Decision, But the Right Decision
When former President Obama signed the Affordable Care Act into law in March 2010, one of the provisions of the law was that consumers who had a health plan in effect as of the day of signing could keep those same plans, rather than switching to ACA plans. These plans were called “grandfathered” plans.
Many health insurers, including Blue Cross NC, chose to continue offering grandfathered plans to eligible customers. But over the past seven years, many customers have given up their grandfathered plans – and many insurers have stopped offering them. Today, we have only about 50,000 customers on a grandfathered plan in our individual market (down from over 330,000 in 2010).
Because no new customers have joined this pool since 2010, the group as a whole has gotten older and sicker. That means they have also become more expensive to insure. And as the number of customers continues to dwindle, the cost to continue to offer the plan becomes disproportionate. We’d need to raise rates for these customers a significant amount to keep offering these plans in 2018. When we considered all of these factors, we determined that Dec. 31, 2017, is the right date to discontinue our grandfathered plans.
Many Grandfathered Customers Will Have Better Coverage Under the ACA
Transitioning to an ACA plan from a grandfathered plan will be a “good news/bad news” scenario for most customers. The good news is their plan will cover more services, in most cases. The bad news is that this coverage will be more expensive than what many customers are paying today. And some customers will have fewer in-network providers in their new plan. That’s because, in some areas of North Carolina, we no longer offer a broad network product to our Affordable Care Act customers.
More Benefits and Richer Coverage
ACA plans offer built in benefits – like maternity coverage – and cap out-of-pocket expenses for customers. This means that ACA plans provide more and better coverage than many pre-ACA plans, but that coverage comes at an increased cost.
No One Can Be Denied Coverage
The ACA requires that insurers offer coverage to everyone who applies, and it limits insurers’ ability to charge older or sicker customers more. This is good news for customers who previously could not buy insurance, or found it very expensive due to their health history. But it makes health insurance more expensive for most people.
Some Grandfathered Customers will Qualify for ACA Subsidies
So what’s the bottom line? Many customers transitioning off grandfathered plans will pay more for coverage in 2018. Many will pay quite a bit more. However, we believe that a portion of our affected customers will qualify for subsidies to offset the cost increase. Comparing current year premiums for grandfathered plans to premiums for an ACA plan next year, young men and women over 50 will generally pay more for ACA coverage, while older men and young women will pay less.
Blue Cross NC will mail notices to customers affected by this change in October. We will include 2018 premium information and map customers to a comparable ACA plan (based on deductible and benefits) to make transitioning to an ACA plan as seamless as possible.