Blue Cross proposes to lower NC Obamacare rates for the first time

Many Affordable Care Act health plan participants in North Carolina could see their insurance get cheaper.

Blue Cross and Blue Shield of North Carolina said Tuesday it requested an average 4.1 percent decrease among ACA plans, also known as Obamacare, that are offered to individuals. The N.C. Department of Insurance will need to approve rate changes in late August or early September. Some customers, however, may see a rate increase.

Open enrollment for the plans begins Nov. 1 and ends Dec. 15.

A Blue Cross NC spokesman said that the insurer is not releasing costs for specific areas because of competition with other insurers, but will make the information public after Department of Insurance approval.

Blue Cross is the only insurance provider to offer ACA plans in all 100 N.C. counties and serves more than 475,000 ACA customers in the state, according to the insurer.

This is the first time the company has requested a rate decrease on the plans it offers on the federal market since Obamacare went into effect in 2014. It’s also the first time the insurer has requested a rate reduction for individual plans in more than 25 years.

About 10 percent of ACA consumers in North Carolina do not get a federal subsidy and have to pay the full premium of the health plan.

“We’re moving in the right direction. But even with a lower rate, premiums are still too high – particularly for those who don’t get a subsidy,” said Patrick Conway, president and CEO of Blue Cross NC.

Blue Cross said that it used information about ACA customers, including how to help manage their care and reduce their medical expenses, to price plans to fit their needs. Blue Cross also used tax savings by the federal tax cut act to lower rates.

During the first three years of the Affordable Care Act, Blue Cross NC lost more than $450 million, which is why it had to increase premiums in the past, the company said. Now, it can finally lower some rates. Blue Cross said it will see a decrease of $120 million from ACA revenue because of the rate change.

Insurers are finally turning a healthy profit in markets like North Carolina, where insurers are proposing to decrease rates, said Rabah Kamal, a policy analyst with the Henry J. Kaiser Family Foundation, a national nonprofit focusing on health issues.

Proposed rates submitted by insurance companies have varied. In 24 states and Washington, D.C. where insurers have submitted proposals for next year, rates ranged from a 20 percent decrease to a 91 percent increase, Kamal said.

Last year, North Carolina approved a 14.1 percent average premium increase for Blue Cross and Blue Shield ACA health plans.

This year, some areas in North Carolina may see a rate increase, according to Blue Cross. But all of the requested county increases are less than 10 percent, the company said.

‘It could have been great news’

Health plans will not be mandatory in 2019. That’s because the GOP tax reform legislation signed by President Donald Trump last year repealed the Affordable Care Act’s individual health insurance mandate.

Blue Cross’s rate request would have been an 8 percent decrease instead of 4 percent if that provision had not been eliminated, the insurer said.

“Today’s news is good news for North Carolina consumers but it could have been great news if not for all the sabotage that we’ve seen coming out of the Trump administration,” said Brendan Riley of the N.C. Justice Center, an advocacy group that focuses on low to middle income North Carolinians.

In addition to repealing the mandate, the Trump administration last year stopped payments to insurers for the cost-sharing reduction subsidies that lower the cost of out-of-pocket expenses, including copays and deductibles for Affordable Care Act plan participants.

The (Raleigh) News & Observer contributed.