Blue Cross NC to raise individual rates by as much as 24% on reinstated health plans

by John Murawski, Charlotte Observer, November 20, 2013.

Blue Cross and Blue Shield of North Carolina said Tuesday it will raise rates as much as 24 percent on 2013 individual health insurance plans that are being extended next year.

The increase is double the price inflation for the same health plans just a year ago, but many Blue Cross customers who have grumbled about rising costs in past years are cheering the news this time.

The health plans were marked for elimination under the Affordable Care Act, the nation’s health care law, but Blue Cross said last week it 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.

The N.C. Department of Insurance will review the proposed rates and, if it determines they are too high, it could order Blue Cross to issue refunds. The agency has not set a deadline to review the proposed rates, which go into effect Jan. 1.

“The key thing is – this is one more year,” said Blue Cross spokeswoman Michelle Douglas. “It’s not saying you can keep this plan forever.”

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. However, legislation before Congress would allow all Americans to buy the 2013 plans, not just those who enrolled by the Oct. 1 deadline.

In recent months, 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.

Kate Walker, for example, saw her monthly Blue Cross premium soar from $98 to $577 for a policy recommended as a replacement to her canceled plan. Walker, 64, said the increase was so steep she was planning to drop coverage altogether until she became eligible for Medicare in August.

Walker of Pittsboro and other Blue Cross customers will have the option of sticking to the plans they have, with price increases, or switching to a 2014 plan, depending on which benefits and costs work best for them.

Walker is keeping her plan, which will likely increase to about $115 a month.

The 2014 plans are generally more expensive because they offer more benefits and because 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 40 percent of its customers would qualify for a subsidy to offset their costs.

‘That’s OK. I’ll take it’

George Schwab of Charlotte is relieved to hear Blue Cross will allow him to keep his 2013 health plan, even with a premium increase.

“I usually find it goes up 10 to 15 percent (a year),” said Schwab, 62 and retired. “That’s OK. I’ll take it. It gets me one year closer to Medicare.”

Schwab had been outraged by the fivefold increase he was facing before Obama reversed course last week and allowed insurance companies to continue offering individual plans that don’t meet Affordable Care Act provisions.

In September, Schwab and his wife got a notice that Blue Cross was canceling their $228-a-month policy and suggested a comparable plan for $1,208 a month.

Douglas, the Blue Cross spokeswoman, noted that some customers will see increases for their 2013 plans exceeding the 16 to 24 percent average. These customers will move up in age categories, say, from age 59 to 60, bumping them up into higher priced plans.

Schwab’s complaints about losing his policy appeared in an Oct. 5 Observer article about people facing premium increases after receiving cancellation notices. Since then he’s been interviewed by reporters with NBC, CNN, CNBC and Fox News.

Schwab went on the Healthcare.gov website and found a similar policy for $958 a month from Coventry Health Care of the Carolinas. By doing so, he became one of a minority of North Carolinians who have been able to get through on the federal government’s website.

Schwab is happy about the reprieve but wishes it would last longer.

“I want it back not just for a year, not just until after the election,” he said. “They should be reinstated until the people that have them decide they don’t want them anymore. (President Obama) promised everybody unequivocally they could stick with their policy. I don’t know whether he knew (that wasn't true) or not. But he did say it, so he should stick to it.”