NC's Blue Cross cutting rate request on individual policies
Posted August 2
RALEIGH, N.C. — North Carolina's largest health insurance company said Wednesday it doesn't need a 22.9 percent price increase after all for individual policies it sells next year through the Affordable Care Act, and it's cutting that request to an average of 14.1 percent instead.
Blue Cross Blue Shield of North Carolina said it would seek less despite uncertainty about how Congress and President Donald Trump would alter or scrap President Barack Obama's health insurance overhaul law. The president threatened over the weekend to withhold funding for a key federal subsidy for insurance companies, calling them "BAILOUTS for Insurance Companies" in a Tweet.
These "cost sharing reductions" have been controversial since the Obama Administration began paying them without a specific appropriation in the federal budget, sparking a lawsuit from Republicans who believe the payments illegal. Trump has suggested before that his administration will hold back the money, which Blue Cross cited in May as the primary reason it would seek such a large increase.
The money amounts to $7 billion nationally and more than $200 million a year for Blue Cross. If the money were guaranteed, the company said in May, it would only ask for an increase of 8.8 percent next year.
Uncertainty remains, but the company said it now knows more about the people it's covering through the individual exchange, including customers that moved to Blue Cross after Aetna and UnitedHealth left North Carolina's exchange.
"The individual market in North Carolina has become less volatile," company analyst Brian Tajlili wrote in a blog post about the rate request. "At Blue Cross NC, we have gotten a better handle on the anticipated medical costs of people covered in this group which has made it easier for us to estimate the necessary price of our ACA health plans."
The state Department of Insurance still must review and approve this rate request, a process that will likely last into the fall. These rates are only for the roughly 502,000 people who purchase individual insurance through North Carolina's ACA exchange, not for those insured through their employer.
Those rates are set separately and vary by plan.
Blue Cross has sought double-digit rate increases since the first year ACA-compliant insurance plans began being sold on a federal marketplace in 2014. The company increased prices by an average of 24 percent this year, 32.5 percent in 2016 and 13.5 percent in 2015.
Blue Cross is the only insurer offering ACA policies in 95 out of North Carolina's 100 counties this year. Cigna is the only other insurer selling ACA policies in North Carolina this year, but it confines its business to five counties near Raleigh. The company in May requested an average 31.9 percent rate increase in 2018 affecting about 21,000 customers, according to its state regulatory filing.
A Cigna spokesman did not respond to messages asking whether the company had revised its rate request since May.