Blue Cross rates approved for reinstated policies

by David Bracken, Charlotte Observer, November 27, 2013.

The state Department of Insurance has approved the rate hikes proposed by Blue Cross and Blue Shield of North Carolina for 2013 individual health insurance plans that are being extended next year.

The health plans had been slated for elimination under the Affordable Care Act, the nation’s health care law, but Blue Cross officials said earlier this month the company would offer the plans next year. President Barack Obama urged insurers to extend the individual plans for one year amid a public outcry over forced cancellations and steep price increases for replacement plans.

After an expedited review, the N.C. Department of Insurance approved an average increase for Blue Advantage plans of 16.4 percent; for Blue Value, 22 percent; and for Blue Options HSA, 23.6 percent.

The increase is double the price inflation for the same health plans just a year ago. But many Blue Cross customers have welcomed the return of the plans.

The extension applies only to Blue Cross customers on individual plans who were enrolled on or before Oct. 1. Those who signed up after will lose their plans at the end of this year. Legislation before Congress would allow all Americans to buy the 2013 plans, not just those who enrolled by the Oct. 1 deadline.

Blue Cross had mailed out more than 151,000 plan cancellations, affecting more than 230,000 customers on those individual policies. The letters listed 2014 premiums under new individual plans that comply with the Affordable Care Act. Some customers saw rate decreases, but many were shaken by increases that doubled and tripled their costs.

Insurance Commissioner Wayne Goodwin has said that more than 473,000 people in North Carolina were affected by the cancellations of insurance plans that don’t meet the minimum standards of the new federal health law. So far only Blue Cross has agreed to extend those plans next year.

The 2014 plans are generally more expensive because they offer more benefits and because next year insurers will not be allowed to turn away applicants with pre-existing conditions.

However, 2014 plans also come with federal subsidies for those whose household incomes fall within a range set by the federal government. Blue Cross officials estimate that about 40 percent of its customers would qualify for a subsidy to offset their insurance costs.