BCBS Reduces Rates for Small Group and Individual Plans

SusieQ2

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Guess they found out something they could do with our reduced commissions!!

In Texas.



News Alert: January 9, 2012
New! BCBSTX Lowering Rates for Some Group and Individual Business
We are pleased to tell you that we are implementing a premium base rate decrease in Texas!
Blue Cross and Blue Shield of Texas (BCBSTX) is reducing premium base rates in 2012 by 4 percent for fully insured group segments (2-150 employees), and 2 percent for most Individual Under Age 65 business.
The change is effective Jan. 1, 2012, for group accounts and April 1, 2012, for individual products affected by this base rate reduction.
Here are more details to help you in assisting your clients:
Texas Fully Insured Group Segments (2-150 employees)
  • The base rate reduction applies to new business on their 2012 effective date and renewals on their 2012 anniversary date.
  • For existing group customers with January, February, and March renewals and January new business, the 4 percent base rate reduction will apply retroactively to premium rates already sold. These groups will be notified by email and letter about the base rate change. We hope to have any premium adjustments reflected in March bills or April at the latest.
  • System updates have been made to incorporate the reduced base rates for renewals with effective dates of April 1, 2012, and after, and new business effective Feb. 1, 2012, and after.
  • New business effective Feb. 1 and after that was sold prior to Jan. 6 will be adjusted retroactively like the January new business. Business pending in Underwriting will be issued with premiums based on the lower base rates.
  • COBRA, COBRA Disability and State Continuation accounts will be impacted. The same base rate change as above will be applied to determine premium rates for COBRA accounts that BCBSTX administers. For COBRA accounts not administered by BCBSTX, the employer should contact their COBRA administrator to implement any premium rate reductions resulting from the base rate reduction.
  • Grandfathered status could be impacted if a premium change resulting from the base rate reduction triggers the employee/employer contribution change threshold under the Affordable Care Act. If you believe a client’s grandfathered status could be impacted, call 800-399-5831 for assistance.
  • There could be some groups that may not receive the reduction, depending on circumstances of their contract. Your account representative will communicate those exceptions to you directly.
  • The base rate reduction applies to medical and drug coverage only.
  • Note: The Blue Access for Producers portal has been updated with the new rates. For prospects with February effective dates and after, please visit Blue Access for Producers and "refresh" any pending small group quote to update your client proposals with the reduced rates.
Texas Individual Under Age 65 Policies
  • Most but not all Individual Under Age 65 policies will receive a base rate reduction beginning in April. This will be a prospective adjustment.
  • Those affected by this change will receive a notice 60 days in advance of the rate adjustment. Letters for changes effective in April will be mailed in mid-January and will then continue weekly based on renewal dates through the remainder of the year.
  • New business rates have also been reduced by an average of 3.7 percent beginning with March 1, 2012, effective dates.
  • The base rate reduction applies to medical and drug coverage only.
  • The new rates will be available on the Online Sales Channel on Jan. 12.
It’s important to note that this is an overall base rate reduction — groups and policyholders could still see an increase or no change to premiums due to other factors such as number of enrollees, risk, age of member, community rating, etc.
As a non-investor owned company, BCBSTX has a constant focus on controlling costs and providing affordable, quality health care benefits to our customers. As such, we continue to make investments into new member health improvement programs, wellness initiatives, member health education and cost transparency, as well as next generation provider collaboration, such as patient-centered medical homes, all with the focus of improving the quality and cost of health care for our customers.
We feel these programs have been successful in delivering the best cost of care in the marketplace and are pleased to be able to pass the savings on to our customers.
If you have any questions about how this impacts a group client, please contact your account representative. For individual clients, please call the Broker Service Unit at 888-672-2583.
Thank you for your continued business!
 
Last edited:
SusieQ, thanks for sharing this information. Looks like BCBS-TX must be uncomfortably close to the 80/85% MLR limit. What's weird is that they use several paragraphs to announce the individual and group price decreases and then end the notice stating that the price decrease might not been seen by the client due to other factors.

So Texas BCBS customers will receive a letter saying, "Good News! Your premium is decreasing, but you might not ever see this decrease. Have a nice day!"

The company is satisfying Health and Human Services by sending out the letter, but will work extra-hard to find ways NOT to lower the premium on existing business. I thought they would have waited to see how the Supreme Court rules on Obamacare late this Spring.

Even though BC-Texas and BC-Illinois are "sister" companies, BC-Illinois is probably paying out more in Medical Care because the costs are higher here and there's more overall mayhem.
-Allen
 

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