Aug. 12--Individual customers of Blue Cross and Blue Shield of N.C. are likely see a lower rate increase for 2013 if previous approvals by the N.C. Insurance Department are any indication.
Blue Cross has filed a request for a 9.94 percent increase with the N.C. Insurance Department. The increase would end four years of progressively lower rate increases for individual health savings accounts (HSAs), as well as two years for individuals' preferred-provider organizations (PPO).
According to the state agency, since 2001 Blue Cross has settled on average for a 2 percentage point lower increase than its requests for individual customers.
The average increase request has been 11.25 percent, while the average approved increase has been 9.21 percent.
The largest request by Blue Cross was 21.3 percent in 2008, which also was the year of the largest approved increase, 18.4 percent.
Blue Cross' smallest increase request was 4.6 percent in 2007, while the smallest approved increase was 3.9 percent in 2004.
Blue Cross spokesman Lew Borman said the latest rate increase requests do not affect Medicare customers. He said Medicare Advantage rates are set in April and go into effect June 1, with rates based on claims experience and medical trends. Insurers typically request lower increases for HSA accounts as a way of persuading customers to take the risk of paying a higher deductible in return for a lower premium rate.
"The premium rate increase for individual products reflects the past year's increase of the underlying cost of health care services and growth in certain procedures," said Patrick Getzen, the insurer's chief actuary. The insurer cited as examples heart disease and knee- and hip-replacement procedures.
"The cost of services continues to rise significantly more than the rate of inflation," Getzen said.
If the rate increases are approved, 61 percent of the insurer's 365,000 individual product customers, or about 220,000, would see premium increases. More than 4,000 customers would see a decrease in their premiums.
What makes the Blue Cross request pivotal is that it controls about 90 percent of the state's individual health-insurance market share. Customers will receive a notification of their 2013 premium rate in October.
The insurance department said in a statement it "will thoroughly review the filing to determine if the requested rate changes are justified." The department approved no rate increase in 2012 for individual HSAs and 5 percent for individuals PPOs.
Blue Advantage PPO is the insurer's traditional copayment-based health plan for individuals. Blue Options HSA and Blue Saver are high-deductible plans that offer customers lower monthly premiums.
For example, the state insurance agency approved Blue Cross rate increases for individual PPOs of 18.4 percent in 2007, 8.5 percent in 2008, 12.2 percent in 2009, 5.4 percent in 2010 and 5 percent in 2011. By comparison, for individual HSAs, the rates rose 9.7 percent in 2007, 4.7 percent in 2008, 3.2 percent in 2009, 2.1 percent in 2010 and were unchanged in 2011.
The rate requests could have some ripple effects within employer-based coverage because Blue Cross and United Healthcare together control about 81 percent of the state's commercial health-insurance policies.
(c)2012 Winston-Salem Journal (Winston Salem, N.C.)
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