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Sticking with you through ACA ups and downs

By Brian Tajlili | July 30, 2018 | Industry Perspectives

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The Affordable Care Act (ACA) came to North Carolina in 2014. It has had its ups and downs. But we stayed in when times were tough, and you stayed with us.

Through it all, we were led by our mission of improving the health and well-being of our customers and communities.

Now today, we are proud to be announcing the first ever rate decrease in the history of Blue Cross NC since entering the current individual market more than 25 years ago.

Premium Rates Being Reduced by $120 Million in 2019

Over the first three years of the ACA, Blue Cross NC lost more than $450 million dollars on the plans.

Despite these losses, we remained committed to offering coverage in all 100 of North Carolina’s counties. Those losses, however, meant rate increases.

Now, for the first time since entering the ACA marketplace in 2014, we are able to reduce rates by an average of 4.1 percent. And, while some areas may see a rate increase, overall increases in every county are less than 10 percent.

Also, it is important to remember that customers who receive subsidies may not ultimately see a change in the cost of their policy, even if their premium rate goes down. Subsidy amounts are based on the price of the second-lowest cost silver plan available to a customer, no matter which plan they actually select. As a result, when premium rates go up or down, so do subsidies funded by taxpayers.

But ultimately, the rate decrease will reduce health care premium rates by $120 million in 2019, which will save both customers’ and taxpayers’ money.

What determined this rate?

Many factors went into the Blue Cross NC’s rate filing: the cost of providing medical services and prescription drugs for members, new provider arrangements that will reduce costs, the suspension of the federal Health Insurer Tax, and the elimination of the individual mandate penalty, to name a few.

But the truth is, even with these lower rates, premiums are still too high – particularly for those who don’t get a subsidy. And if Washington had restored Cost Sharing Reduction (CSR) payments to insurers that were eliminated in October of 2017, our requested rates would be another 14 percent lower.

However, we priced the impact of this in such a way that will help lessen the impact of the funding loss for our customers.

Even if CSR payments were funded and the individual mandate penalty was still in place, premiums on ACA plans are still much higher than pre-ACA individual market plans. This is due to the fact that the ACA expands access but doesn’t address the underlying cost of health care. The law also added new coverage requirements and taxes.

Regardless, we have to keep working to bring costs down – and we plan to do just that.

Blue Cross NC has deep roots in our state. We are proud to be the only insurer serving over 475,000 individual ACA customers across in all 100 counties.

That wouldn’t be possible without our loyal customers. We thank our customers for sticking with us through the ACA’s ups and downs. No matter what, we are committed to our mission to work for our customers and their families.