Blue Cross and Blue Shield of North Carolina, the state’s largest health insurer, said Monday it is seeking an average 25.7 percent rate increase for customers covered under the Affordable Care Act.
The proposed rate hike is double last year’s 13.5 percent increase approved for Blue Cross, an indication that health insurance costs continue to rise despite the federal health care law. The Affordable Care Act was enacted in 2010 to expand coverage and also to stem runaway health care costs.
Blue Cross’s proposed rates require federal and state regulatory approval before they go into effect in 2016, which will be the third year that Americans will be able to purchase health insurance under the ACA. The law has expanded coverage for the uninsured by requiring most people to buy health insurance and by providing financial subsidies to those in lower income brackets. The ACA also prohibits insurers from turning away ill applicants or charging extra to cover serious illnesses.
Blue Cross’s actual rate increases in 2016 will almost never equal 25.7 percent, which is an average of several dozen individual insurance plans throughout the state. Rate increases for specific plans will range from 5 percent to 32 percent, depending on several factors, including the customer’s age, where the customer lives and whether the customer smokes cigarettes.
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The Chapel Hill-based insurer provided one example Monday of how its rate increase would play out in 2016. A 40-year-old nonsmoker in Raleigh enrolled in the Blue Value Silver plan with a $2,500 deductible would see his monthly premium increase from $315.01 this year to $391.23 next year, a monthly increase of 24.2 percent.
During a conference call with journalists, Blue Cross chief actuary Patrick Getzen said the rate increase proposal is based on 2014 data and noted the company might resubmit a higher rate request based on more recent data. He said the 2015 pool of customers is sicker and costlier than the 2014 pool, but noted that more younger and healthier residents could buy health insurance for 2016 as the penalty increases for failing to obtain coverage.
Blue Cross has 397,000 customers under the ACA, up from 258,000 last October. Getzen said 94.2 percent qualify for financial subsidies. As the state’s dominant health insurer, Blue Cross covers the majority of the 560,357 North Carolina residents enrolled under the ACA.
Blue Cross has nearly 190,000 customers on individual insurance policies that were not purchased on the federal marketplace and are not subject to the 25.7 percent proposed rate increase. The proposed rate increases for these customers will be filed this summer, Getzen said.
Also not affected by Monday’s announcement are Blue Cross customers insured through their employers or through the company’s Medicare supplemental plans.