News and Blog

Monday, 13 June 2016
62% increase from BCBST - Individual vs. Group Plans

Across the country carriers cannot seem to collect enough premium dollars to fund the ever increasing claims brought on by Obamacare and Government subsidized heath plans. I don't have a national tally of how much was lost in the individual market over the past 2 1/2 years but its safe to say they are losing hundreds of billions. Thus, the only way to stop the bleeding is to collect more premium. 

Before ACA plans (guarantee issue, no pre-x, community rates, mandated benefits) carriers could predict and set prices fairly based on each persons specific risk. Today with millions of previously uninsured gaining access to mostly/nearly free insurance with immediate comprehensive coverage. We have seen it in our office, people need an expensive procedure and put it off because they could not get coverage under the old rules. Now, they sign up and can have the expensive procedure or prescription immediately and if they want to drop the coverage when their treatment is done, so be it. 

Group coverage on the other hand while managed under pretty much the same rules is managing quite well. The main reason is most had prior coverage so there are very few who would have been in the previous scenario. Here are some other interesting facts from JD Hickey, president of BCBST. 

They analyzed 2015 claims data for marketplace members and compared it against members who get their coverage at work. Their marketplace members had: 

  • Higher rates of chronic conditions, including diabetes and cardiovascular disease. 
  • 42 percent higher rates of impatient hospital admissions with 15 percent longer stays. 
  • 14 percent higher rates of emergency room utilization. 
  • 67% higher rates of behavioral health visits. 

BCBST's marketplace members had on average, 43% higher medical claims costs and 58% higher pharmacy claims costs. 

These facts are from JD Hickey, MD's editorial in the Tennessean, June 13, 2016

Posted on 06/13/2016 1:52 PM by David Moore
Friday, 3 June 2016
BCBST individual rates see another big increase for 2017

BlueCross BlueShield of TN added 166,425 new subscribers in 2016 even after raising rates by an average of 37.5%. This accounted for 62% of all new enrollees as BCBST's rates continued to be some of the lowest across the state. Unfortunately, even with the higher rates they still can't stop the financial bleeding as members are still sicker than expected. After losing $300 million in 2014 and 2015 it appears they will lose more than $100 million more in 2016. 

To compound the problem the Federal ACA Reinsurance Program is ending on December 31st. This program reimburses carriers for high claimants and it's loss is expected to add another 6% to individual health insurance rates. As of this writing we know that Farm Bureau is asking for a 29% increase for their 3,500 member and Aetna 14%. 

Many who receive Government subsidies are protected from these increases and the now extremely high rates. Those unfortunate individuals and families who don't have access to group coverage and earn too much for a subsidy are facing huge insurance premiums for in many cases very high deductible plans. What is not being talked about is how much more these higher premiums are costing the taxpayers as our President likes to say rates are not actually increasing for millions who receive these subsidies - what they are not saying is the Government (taxpayers) and footing this rapidly increasing bill. 

What will people do? Good question, the higher penalties will keep many paying premiums but as rates continue out of control increases the penalty will look like a better option for many. This of course only puts more pressure on the carriers profitability.

David Moore

Posted on 06/03/2016 9:45 AM by David Moore