BCBS of NC Announces a Refund of Premiums

[Rivers1]

BCBS of North Carolina is refunding an average of 1.5 months of premium($700) to each individual policy holder due to the reform bill.

Also, only a rate increase of 5.3% for next year.

link--> Blue Cross to refund $155M to NC policyholders | WCNC.com | Charlotte Health & Medical News, Nutrition and Fitness | WCNC.com | News for Charlotte, North Carolina

 

[Crabcake Johnny]

Easy to read in between those lines. Don't spend that refund check to fast - you'll need it for another policy after BCBS cancels yours.

 

[AllenChicago]

The below excerpt from the article is fascinating and suspicious at the same time. Why would the lower-deductible 2014 policies reduce costs to BCBS?

"The refund is coming from reserves that were set aside to pay for future health care for current policyholders. Health care reform will require those policies be phased out or changed significantly in 2014 and the company won't need as much money to cover future costs."

Perhaps a deal was struck between BCBS and North Carolina to steer millions of younger, healthy, subsidized applicants to them in 2014. Maybe I'm just being unjustifiably skeptical.
-AC

 

[Crabcake Johnny]

The reduction of costs comes from the pending cancellation of those plans.

 

[somarco]

pending cancellation

Fraud? Misrepresentation?

Can't see mass cancellations on that basis. Legal cost to defend and PR would be a killer.

 

[Crabcake Johnny]

Merely commenting on this sentence:

"Health care reform will require those policies be phased out or changed significantly in 2014 and the company won't need as much money to cover future costs."


"Yes...ma'am...I hear you but you don't understand. Your plan wasn't cancelled. We phased it out."

 

[AllenChicago]

The reduction of costs comes from the pending cancellation of those plans.

So at the end of 2013, BCBS-NC cancels their plans and transfers the policyholders to new, lower-deductible BCBS-NC plans...and the cost to BCBS-NC will be less? I'm confused. But no matter, we have more immediate issues to overcome between now and 2014.
-AC

 

[Crabcake Johnny]

Just my opinion. Come the end of 2013 their clients will receive a letter letting them know they have two choices:

A) Purchase a new exchange plan
B) Allow their current policy to expire effective "X" date

 

[Rivers1]

Just my opinion. Come the end of 2013 their clients will receive a letter letting them know they have two choices:

A) Purchase a new exchange plan
B) Allow their current policy to expire effective "X" date

I agree but here's the funny thing.
Today I've had no less than six previous contacts I couldn't help with their health insurance(all BCBSNC clients) that saw this report on the local news stating it's BS because BCBS just sent them a letter informing them of pending increases ranging from 15-23%. Now they're ready to discuss new coverage options.

Some games are being played if you ask me.

 

[somarco]

"Health care reform will require those policies be phased out or changed significantly in 2014 and the company won't need as much money to cover future costs."

Most policies written prior to 2014 (including those grandfathered) will probably not survive even though "if you like the plan you have you can keep it". So in a way, you can look at the entire block most anyone has and say reserves don't have to be as great.

But reserves required by the state is usually determined based on a 3 yr cycle, at least for health insurance. For sure, some of the policies will need to be reserved for long tail claims but much of that is reinsured, even for large carriers, so very little is reserved for those large or long tail claims.

There is something else going on here, and I can't put my finger on it, but the reserve comment is a smoke screen.