Questions over federal funding driving Blue Cross request for ACA premium increase

Posted May 25

— Blue Cross Blue Shield of North Carolina on Thursday requested 22.9 percent premium increase on health plans offered on the marketplace, attributing much of the increase over uncertainty created by the health plan recently passed by the U.S. House.

The state's largest health insurer – and the only company to offer Affordable Care Act plans in all 100 North Carolina counties – said it still could scale back its participation in the marketplace next year, depending on how much of a rate increase state regulators approve.

"Our filing does not guarantee our participation in offering plans," Brian Tajlili, director of actuarial and pricing services for Blue Cross, said in a statement.

Blue Cross has lost more than $460 million on ACA plans over the last three years, primarily due to payouts for medical care and prescription drugs because the people who enrolled in the plans were older and sicker than expected. Although Tajlili said costs again played a role in the proposed rate increase for 2018, the biggest driver is the expected loss in federal reimbursement of its cost-sharing reductions, or CSR, to help low- and moderate-income enrollees with out-of-pocket expenses.

CSR funding must be authorized by Congress, and the American Health Care Act, which is awaiting U.S. Senate action, doesn't include any provisions for it. That means insurers, who still must offer the plans next year, have to spread out the unreimbursed costs among other ACA enrollees.

"In our view, with so many North Carolinians struggling to afford health care, the 2018 increase is still too steep, but higher premiums are necessary because key federal funding for health coverage appears to be going away," Blue Cross Chief Executive Brad Wilson wrote in a blogpost on the company's website.

"ACA plans with cost-sharing reductions are a lifeline for people who qualify for them. The lower costs can often mean the difference between seeking medical care or not," Wilson wrote. "If the federal funding disappears, who makes up for that? Policyholders. That’s because premiums have to go up to cover those costs. Otherwise, insurers would not be able to sustain that business over the long haul."

The federal government paid Blue Cross about $200 million in CSR reimbursements in 2016, he said.

With CSR, officials estimated that premiums would have gone up only 8.8 percent next year.

A tax on health insurers also accounted for part of the proposed increase, officials said. The ACA mandated the tax since 2014, but Congress temporarily suspended it two years ago, meaning that 2017 premiums were slightly lower, they said.

Last year, the state Department of Insurance granted Blue Cross a 24.3 percent rate increase for 2017 coverage.


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  • Henry Cooper May 26, 4:25 a.m.
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    Once again Groundhog day.

    The professional politicians dressed as Dems are no diff from the professional politician dressed as a Republicans, history proves this in past corruption being very evenly split over history.

    We are going to keep looking at the shiny objects and the career politicians from both sides will continue to stick it to us.

    Rep or Dem does not change the fact that my house payment (and others like me) was once my biggest monthly expense. Now healthcare is the largest monthly expense for myself and many others.

    I was in my house before ACA and my health insurance cost since I bought is up 437%... 437% !!!! How does anyone plan for that? Between coverage changes for employers to save money and the "built-in undesignated" subsidy paid for the people getting financial assistance I will literally have to work longer to afford retirement.

    Thanks to both sides of the professional political brotherhood.

  • Teddy Fowler May 25, 5:47 p.m.
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    View quoted thread

    Cry me a river LOL.

  • Clarence Drumgoole May 25, 3:17 p.m.
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    Republicans causes the chaos, They never supported ACA from the start. Now reap the consequences. Had they supported the ACA and encouraged young folk to support healthcare plan, things would be different. Obama gone, Trumps Baby now!

  • Edward Anderson May 25, 1:55 p.m.
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    Here, here! *applause*

  • Bob Gibbs May 25, 1:51 p.m.
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    I am an independent. The ultimate problem here is not saying 'Obama did this', 'Trump did that'. The problem is Congress. Everyone knew healthcare was in dire straights prior to the ACA. Neither party wanted to work together to fix it. Congress kicked the can the road instead of doing what we as a nation elect them to do.... work TOGETHER to solve our problems. This should be a non-partisan procedure with compromise. Not the Dem/GOP way or the highway. Congress, stop pandering and looking to always get re-elected and do the job of governing for all of us in our stead. Work together for a change!

  • Andy Holt May 25, 1:24 p.m.
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    There is NOTHING new here, it is just the continuance of the failed plan that it was originally set up to be. It was designed to collapse under it's own weight because it NEVER was fiscally sustainable. Everyone knew that it was set up as a fast track plan to a Gov't run single payer system, and it has FINALLY reached the end point. Now, we are back to the point of dealing with greedy Insurance companies, big pharma, and overpriced doctor's. THIS happens when our elected officials agree to "let's go ahead and pass it, so that we can see what's in it". Of course, the narrative that you will continue to read here on WRALiberal is.... President Trump denies coverage to millions of Americans, with NO word mentioned of Obama, Pelosi, Harry Reid and the entire cast of crooks that got us to this point?

  • Edward Anderson May 25, 12:34 p.m.
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    No, let's blame BCBS for being a "not-for-profit company" who are siphoning funds from both federal and state sources to pay their CEO millions while they try to squeeze every potential penny from their policyholders because they are CROOKED EVIL blood-sucking vampires who are only about making money money money.

  • Patrick Morningstar May 25, 12:13 p.m.
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    Im not blaming BCBS. Im referring to the tone of the article. Read Jim Dunn's response, he speaks the truth. The CSR funding was and is illegal. Instead of blaming the ACA for illegal provisions, lets blame the Trump administration for not continuing to break the law.

  • Andrew Stephenson May 25, 11:54 a.m.
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    I don't think BCBS has any reason to lie about why they are raising rates.

  • Patrick Morningstar May 25, 11:32 a.m.
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    yep. increase rates because of the uncertainty of the future, not because of what happened in the past. Makes sense...So when will the price of milk go up to prepare for all the cows dying next year??