The Sept. 23 deadline for compliance with several health reform benefit mandates brought negative impacts for several Blue Cross and Blue Shield plans. Most notably, Blue Cross
and Blue Shield of North Carolina agreed to refund $155.8 million to
members enrolled in individual coverage, citing the health reform law's
grandfathering provisions as the catalyst. And other Blues plans have
blamed the reform law for withdrawals from the child-only coverage
market and for premium rate hikes in other lines of business, drawing criticism from regulators.
Under an agreement with the state insurance commissioner, BCBSNC said it will issue a one-time refund to 215,000 members. CEO Brad Wilson said at a Sept. 20 press conference that the funds are coming out of the company's "active life reserves," which are "portions of the premium that we set aside in the early years of a policy to keep premiums more stable over the life of the policy, as customers' medical expenses rise."
Under the health reform law's grandfathering provision, "policies purchased or substantially modified after March 23 of this year will end in 2014," Wilson said.
"Therefore, the reserves held for these products will cover a much shorter period of time, which allows for these funds to be released." He explained that refunds will equal a little more than 1.5 times an individual's monthly premium. A policyholder who pays $380 a month will receive a check for $690.
Yet BCBSNC also requested an average 7% rate increase for Blue Advantage PPO customers in August. The insurer said when it filed the proposed increase that it was the lowest since 2007, and that 28,000 customers would see decreases in their rates. The insurance commissioner approved a 5.37% increase.
Under an agreement with the state insurance commissioner, BCBSNC said it will issue a one-time refund to 215,000 members. CEO Brad Wilson said at a Sept. 20 press conference that the funds are coming out of the company's "active life reserves," which are "portions of the premium that we set aside in the early years of a policy to keep premiums more stable over the life of the policy, as customers' medical expenses rise."
Under the health reform law's grandfathering provision, "policies purchased or substantially modified after March 23 of this year will end in 2014," Wilson said.
"Therefore, the reserves held for these products will cover a much shorter period of time, which allows for these funds to be released." He explained that refunds will equal a little more than 1.5 times an individual's monthly premium. A policyholder who pays $380 a month will receive a check for $690.
Yet BCBSNC also requested an average 7% rate increase for Blue Advantage PPO customers in August. The insurer said when it filed the proposed increase that it was the lowest since 2007, and that 28,000 customers would see decreases in their rates. The insurance commissioner approved a 5.37% increase.
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