Blue Cross and Blue Shield sold health insurance policies to 232,000 North Carolinians under the Affordable Care Act, the company said Thursday, noting that the enrollments fell far short of the insurer’s expectations required for stable insurance rates.
The new customers were skewed toward older, sicker residents who will drive up insurance costs and drive up rates for next year’s customers who buy subsidized coverage under the nation’s health care law, warned Barbara Morales Burke, Blue Cross’ chief compliance officer.
“Blue Cross’ ACA customers are older and have more chronic conditions than we anticipated when we set rates last year,” Burke said on a conference call with journalists. “This will have an impact on our future rates.”
The controversial law was designed to shrink the ranks of the uninsured; it requires most Americans to buy health insurance and makes it illegal for insurance companies to turn away applicants with costly, pre-existing conditions.
Chapel Hill-based Blue Cross is the state’s largest health insurer and the only insurer that sold subsidized policies in all 100 North Carolina counties.
Coventry Health Care of the Carolinas sells subsidized plans in 39 counties but has not disclosed its enrollments here. The company has signed up 500,000 people in about a dozen states, and North Carolina emerged as one of the Coventry’s top states for enrollment, said spokesman Walt Cherniak.
Last week, federal officials said more than 357,000 North Carolinians had selected a plan under the Affordable Care Act, but that tally includes thousands of residents who have never paid a premium and didn’t buy insurance.
The Blue Cross enrollments reflect insured customers who signed up from October through May 1 and are still paying premiums. About 15 percent of customers who signed up never paid a premium and are not included in the 232,000 figure, Burke said.
Burke said it’s too early to say how much next year’s rates will increase because the calculation will be based on health care usage patterns of the new customers, many of whom have just signed up. But she said the new customers are already logging more claims than expected for costly procedures and have a higher incidence of diabetes, depression, asthma, arthritis and heart disease.
The Kaiser Family Foundation has estimated that rates could increase up to 2.4 percent if an insurance company didn’t sign up enough younger, healthier customers to offset the costs of insuring sicker people.
Adam Linker, a health policy analyst at the N.C. Justice Center, said most customers who buy subsidized insurance would be buffered from rate increases because the health care law caps monthly premiums as a percentage of household income.
Blue Cross said 91 percent of its enrollments qualified for federal subsidies.
Blue Cross planned for 50 percent of new customers to be age 34 and under, but the actual number was 32 percent. Blue Cross expected that 15 percent of customers would be 55 and older, but that demographic ended up accounting for 29 percent of the new enrollments.
Burke said the reason fewer signed up than expected is many customers kept their insurance plans from last year, as permitted by the Obama administration, and therefore didn’t sign up for subsidized plans. About 243,000 were eligible to keep old plans, and most chose to do so. That deprived Blue Cross’ subsidized insurance pool of tens of thousands of customers who were insurable in 2013, the last year that insurers could turn people away for pre-existing conditions.
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