BCBSTX Discontinue U65 PPO Network

Jul 23, 2015

  1. lisamc

    lisamc Expert

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    News Alert – July 23, 2015

    Individual/Consumer Markets
    What to Expect for 2106 Open Enrollment Plans

    On Monday, the Texas Department of Insurance gave Blue Cross and Blue Shield of Texas (BCBSTX) the clearance to announce a change in retail product offerings for 2016. We wanted to share this information with you first.

    The retail market has evolved significantly since the opening of the Health Insurance Marketplace in 2014. These changes require BCBSTX to make adjustments that will allow us to continue offering sustainable health insurance options.

    There are some changes in the plans we intend to offer in 2016. Most significantly, we won’t be offering our Blue Choice PPO insurance plans for our under 65 block of business going forward.

    We intend to offer other products, on and off the Marketplace. A new product has been filed that we believe will give you a flexible choice for your clients. We will be able to share information about that product if and when it is approved by the Centers for Medicare & Medicaid Services (CMS) closer to open enrollment.

    We are committed to offering competitively priced individual insurance options in every county in the state, both on and off the Marketplace.

    During the months leading up to the beginning of open enrollment, we will talk publicly about the plan transition, and make information available to members and key stakeholders. Below are some details you can use when reaching out to your PPO customers. We recommend that you start having these conversations soon since our proactive outreach could lead to media attention.

    We stand ready to assist you and your clients through this transition.

    Details for You

    Currently, we have about 367,000 individual Texas members who will have their PPO plan discontinued in 2016. This number fluctuates monthly.
    Around 148,000 Texas members are in grandfathered PPO plans that will not be discontinued. Our Blue Choice PPO network will continue to serve these members.
    This change does not affect our product offerings for our employer group customers or Medicare members.
    Our Blue Advantage® HMO network will remain. We are working to expand the numbers and reach of providers participating in that network.
    We only had the first full year of ACA claims data for analysis this year, for 2014 claims. In the individual market segment in 2014, BCBSTX paid out more than $400 million more in claims than it collected in premiums. Losses that high are unsustainable, and we have adjusted our offerings – as many insurers have – to be sustainable in the new market reality.
    Not all hospital systems or large physician networks will be participating in our network options for individual members. While this was true in previous years, the number of providers not in network due to the discontinuance may be greater in 2016. We have ensured that we have an adequate network to provide the physicians and hospitals needed to serve our retail members in each market, and we continue to have discussions with additional providers.
    Talking Points for Discussing the Changes with Your Clients

    Why is BCBSTX discontinuing the Blue Choice PPO?
    For the past two years, BCBSTX has been the only health insurer offering an individual PPO plan in all Texas markets. BCBSTX found that the PPO is not sustainable at an affordable price due to anti-selection. BCBSTX will continue to offer other plan options in all 254 counties, on and off the Marketplace.

    What will this mean for individual members who currently have the PPO plan?
    BCBSTX will be transitioning affected individual members to another plan, so you will not experience a gap in coverage. You will also have the option of choosing a different plan during 2016 open enrollment.

    Are there providers who were available under the PPO who will no longer be in network for BCBSTX members on any plan?
    There are some providers who were in BCBSTX’s individual PPO plans networks who will no longer be an in-network option for individual members, except those in grandfathered plans. These providers declined to participate in the Blue Advantage network.

    If you are seeing a provider who will no longer be available to you through the new plan’s network, BCBSTX will work with you to find a new provider. If you are currently undergoing a course of treatment, BCBSTX will work with you and your providers to minimize the impact to your care, just as if you changed plans for any other reason.

    BCBSTX continually seeks opportunities to work with providers to offer the best solutions for our members.

    Will there be a rate increase for HMO for 2016?
    BCBSTX’s rate filings are currently under review by CMS, so that information won’t be available until rates are finalized and approved. BCBSTX pricing is designed to allow the insurer to offer sustainable products and services to its customers for years to come. A medical loss ratio (MLR) requirement is in place to protect consumers by requiring a high percentage of premiums to go to medical costs. If that requirement is not met, customers may be eligible for a premium rebate.

    What would have been the rate increase for PPO for 2016 if it was still available?
    A plan’s success requires the right ratios of enrollees to providers, and of the amount of premiums paid in to amounts paid out for care provided. In the 2014 individual business, BCBSTX paid out millions more in claims than it collected in premiums. Losses that high are not sustainable. Like any business, BCBSTX must make necessary adjustments. There were no options that kept the PPO sustainable and still allowed for other plans to be offered across the state.

    Why couldn’t you just continue offering the PPO and increase the rate for it?
    Under ACA, individual business is rated using a single risk pool, meaning all individual plans had to be looked at together. This means BCBSTX couldn’t just look at the pricing of the PPO separately. If BCBSTX had kept both the PPO and HMO, it would have added dramatic costs for every member with an individual plan.

    Is group subsidizing individual business?
    The group line of business operates separately from the individual line of business. BCBSTX’s group rates are based on expected cost of doing business for 2016 for group business.

    What can I do now?
    This announcement does not affect your coverage through the end of the year. There is no need to do anything right now.

    Shopping for 2016 plans is expected to open Oct. 10, when insurers are allowed to publicly release the full range of plan offerings for the coming year. You will receive a formal notice from BCBSTX by Oct. 1 that will give you the details of your plan changes.

    We encourage you to learn more about how an HMO works. BCBSTX has information about HMOs in the “insurance basics” section of their website at bcbstx.com.

    If you have more questions now, you can call BCBSTX at the toll-free Customer Service number listed on the back of your ID card.
    lisamc, Jul 23, 2015
  2. Ann H

    Ann H Guru

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    Big news for a big carrier in a big state like TX.
    It had to come sooner or later.
    Too bad it's now.
    Ann H, Jul 23, 2015
  3. russelltw

    russelltw Guru

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    what happened to ACA providing more choice and better coverage...(sarcasm)

    HMO's are the future of healthcare under ACA. We are seeing regional limited network plans in my state.
  4. Yagents

    Yagents Guru

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    I'll serve whatever is on the menu if no p.p.o avail, but the real loser is our clients and especially those that are unhealthy.

    5 yrs ago, all we had were p.p.o options, now it's reversed. What changed?

    Vote accordingly.
    Yagents, Jul 23, 2015
  5. AllenChicago

    AllenChicago Guru

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    So much naivety and deceit in that BCBS-TX letter that I won't even comment on all of it. But there is one question regarding their logic...

    If BCBS-Tx lost $400 million in 2014, how will converting all these expensive people to lower premium HMO plans in 2016 reduce their medical costs enough to turn those 2014 and (2015?) loses around? Lower premium + Lower Medical Expenditures cancel each other out. Net result is more of the same...continued losses on the income statement.

    Most of the Blue Cross companies would love to go back to their old ways of finding reasons to deny claims, cancel plans, etc.. I'm happy for clients that they can no longer do that. They probably would like to simply leave the Individual Under-65 segment altogether, and just focus on Group and Medicare. I wonder why they don't just cut their losses and bail on U-65?

    Speaking of cutting losses, what are the odds that agent commissions get trimmed in 2016, along with the Medical Provider networks? If a company is being financially damaged by a certain segment of business, it's insane to pay agents to bring in more of that business don't cha think?
  6. kgmom219

    kgmom219 What's Next?

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    The letter made me look for vodka...

    And they are full of it. They don't want these people. They are dumping them. They want them gone. Although the biggest savings would come (if they moved) from the deeper provider discounts in the Advantage network and the crappy closed RX formulary.

    I still think we are fine on commissions in 2016. They just dumped $367K people. They pissed off the agent community. They want to keep the HMO (profitable) business.

    But I could be wrong. GO CIGNA!!!
    kgmom219, Jul 23, 2015
  7. AllenChicago

    AllenChicago Guru

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    I like Vodka for celebrating. Looks like it'll be awhile before my next slug..

    I don't think CIGNA is drooling at the prospect of acquiring all the medically expensive people that BCBS is jettisoning. Particularly with the Insurer Support/Bailout program winding down.

    They (Cigna) might do in Texas what they did in California (?) to discourage enrollment in the low deductible/rich benefit plans, by paying 0% commission for Platinum acquisitions and only 1% Commission for Gold. I don't know if it worked though.
  8. taterpeeler

    taterpeeler Guru

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    Good move for the industry.... suck it up people.... you knew it was coming if you listened to me.... next. cigna will probably now yank the filing on the PPo.... no one wants to be that one guy... and they will be the ONLY one with a PPO and hence getting all my prego and sickos... you listening Chaz Pierce?
  9. somarco

    somarco GA Medicare Expert

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    I suspect "lower premium" is a relative term.

    The premiums won't be lower, but less than they would have been with the PPO.

    The HMO model allows them to deny OON claims that may not have been denied under a PPO.

    Cutting commissions will provide some relief but only on the admin side. Lower commissions does not mean improved loss ratio's.

    You can take that one to the bank.

    The less they pay agents the better. They will get the price shoppers, not the ones looking for loopholes (broader networks, broader Rx formularies).

    The dumber the buyer the better. The last thing they want is an informed consumer.
    somarco, Jul 23, 2015
  10. WCMason

    WCMason Guru

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    F#%+&! Last year I spent most of the annual enrollment period moving Aetna Medicare people off of their advantage plan that has gone sideways on them. Now, I'm looking forward to moving all of my U65 BCBS clients, including myself, to something else this fall. ----------

    Oh, gosh, how could I have missed it? I hang on your every post--as of course we all do--but somehow I missed the one where you predicted that the Blue Cross Blue Shield PPO of Texas plan would be eliminated in 2016. I have got to cut out the Netflix and pay more attention to this forum.
    WCMason, Jul 24, 2015