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Health insurance shock: Blue Cross N.C. sends 42,000 the wrong rates, many with huge hikes

Blue Cross and Blue Shield, the state’s largest health insurer, said Thursday that about 42,000 customers around the state received insurance renewal letters with incorrect rates, some showing cost increases of more than 100 percent.

The Chapel Hill company has been flooded with calls since Wednesday from irate customers who began receiving their notices this week. Blue Cross officials soon realized the insurance rates were incorrectly transferred from the company’s database to the computer-generated renewal notices.

The affected customers are on grandfathered Blue Advantage Plan A policies with a $15 co-pay, and all 42,000 customers on that individual health plan were sent the wrong rates for 2015, said Blue Cross spokeswoman Michelle Douglas. The plans, which are generally cheaper and provide less coverage than newer ones, are grandfathered for customers who signed up before the Affordable Care Act passed in March 2010.

“It’s just infuriating,” said Tammie Payne of Matthews, who got a notice that the plan she has had for seven years would go from $1,320 a month to $1,999, a 51 percent hike. “I’m not going to find a better plan. I liked my plan.”

The erroneous notices, most of which are too high, landed less than a week before a neck-and-neck Senate race in which the Affordable Care Act has been a hot issue. Republican challenger Thom Tillis has repeatedly chided Democratic incumbent Kay Hagan and President Barack Obama for telling people they could keep their insurance plans if they liked them.

On Thursday, the Observer got about a dozen messages about large Blue Cross rate hikes, most blaming Hagan and Obama. Experts had different views on whether the error could affect the election.

Jennifer Duffy, who covers the Hagan-Tillis race for The Cook Political Report, said it’s possible. Outrage caused by the inflated notices, confusion over what the real rates are and concern about actual hikes announced by Blue Cross could fuel anti-Democrat voting, she said.

“I think this race is close enough that every vote counts and this isn’t going to help (Hagan),” Duffy said.

But Robert Blendon, professor of health policy and political analysis at Harvard University’s School of Public Health, said voters are likely to recognize this as a corporate error. Blendon, who does political polling, said he realizes that the foul-up comes during an intense and often negative campaign.

“People are going to be sure there was a conspiracy to affect the election,” he said, but that seems unlikely.

Setting it straight

Blue Cross customers can call customer service Friday to verify their 2015 rates, Douglas said.

The insurer plans to mail out corrected renewal notices next week. About 38,000 customers will see smaller increases than they received this week, but about 4,000 will see their rates increase when they receive notices next week, Douglas said.

“There may be situations where people received a letter saying they got a rate reduction,” Douglas said. “When they get a corrected notice (next week), their rate will increase.”

Most rate increases for the Blue Advantage Plan A policies will be below 30 percent, Douglas said. Several thousand will be above 30 percent.

“No one should have gotten more than 100 percent, which we have seen,” she said.

Douglas said the glitch was caused by “good old classic human error” in transferring data.

In all, 239,000 Blue Cross customers have been sent renewal letters, but customers on other policies were quoted correct rates for 2015. The average rate increase for the entire group of customers is 13.4 percent. Blue Cross did not provide the average increase for the 42,000 customers on the Blue Advantage Plan A policies.

Rates not linked to ACA

The incorrect rates are separate from marketplace health insurance plans purchased under the Affordable Care Act. Those renewal letters will be sent after federal regulators sign off on the rates, which is not expected to happen until next week.

Some of the people who got notices of huge hikes blamed the act before they realized Blue Cross had erred.

Melisa Thompson of Lincoln County received a notice saying her grandfathered policy is increasing from $1,600 a month this year to $2,300 next year, a 44 percent jump. She said she also pays for a similar policy for her sister, which went from $700 to $1,300 a month, up 86 percent.

She blamed Democrats and the ACA: “It’s just a joke for anybody to refer to this as affordable.”

Payne said she called Blue Cross on Thursday and a supervisor told her rates were going up because so many people had dropped the grandfathered plans, which provide less coverage at lower rates than those that comply with the ACA. If that’s true, she said, it’s because the act is forcing them to switch.

“We all were told a bunch of lies by our president and Kay Hagan,” Payne said. “I was told my premiums would be slashed by $2,500, I could keep my plan, I could keep my doctors.”

When Payne learned that Blue Cross had acknowledged errors, she described herself as in “wait-and-see” mode. But she said she still faults Hagan for voting on party lines on a bill that has negative effects.

The act has contributed to rising rates. It mandates a wider range of coverage for new policies and forbids insurers to exclude customers or raise their rates based on medical conditions.

However, it also brought insurance companies new customers, leading to better-than-expected profits for many companies, and provides subsidies that help cover premiums and out-of-pocket costs for low- and moderate-income buyers. And some say it appears to be helping slow the nation’s longstanding growth in health care costs.

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