N.C. Blues Plan Ponders Exit From ACA Market in 2017

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By Andrew M. Ballard

Feb. 11 — BlueCross BlueShield of North Carolina, the state's largest health insurer, is considering whether to continue participating in the Affordable Care Act insurance exchange in 2017.

Lew Borman, a spokesman for the Blues plan, told Bloomberg BNA Feb. 11 that continued participation will have to be evaluated as the insurer is “consistently losing money on those plans.” BCBSNC had already scaled back its offerings for the current calendar year and had increased the rates for ACA individual plans by an average of about 32.5 percent, he said.

UnitedHealthcare Leaving?

North Carolina's insurance commissioner, Wayne Goodwin, recently expressed his concern about large financial losses that insurers in the state were facing and warned they might withdraw from the market. In a Feb. 2 letter to Health and Human Services Secretary Sylvia Mathews Burwell, Goodwin said there were reports that UnitedHealthcare, another of the state's three qualified health plans, might stop participating in the exchange.

Goodwin expressed concerns about a large number of insurer withdrawals and consolidations, service area reductions and the lowering or elimination of insurance agent commissions in North Carolina.

According to Goodwin, prior to the ACA, North Carolina had 29 insurers offering individual health insurance coverage and 27 insurers offering group coverage. For 2016, he said, the number of those insurers have dropped to eight and 10, respectively.

Commissioner Sees Problems

“The reasons for these withdrawals and consolidations are difficult to pin-point,” Goodwin wrote in his letter. “However, anecdotal evidence suggests insurers have left health insurance markets in droves due to the increased burdens of the ACA.”

Regarding service area reductions, Goodwin cited the Blues plan's decision to reduce offerings in several areas of the state after it suffered a “$123 million operating loss in 2014 and continued poor emerging experience in 2015.” All three of North Carolina's qualified health plan insurers, which also include Aetna/Coventry, have reduced the number and types of plans offered on the exchange in 2016 in the face of significant financial losses, he said.

In announcing its plan to increase rates and reduce plan offerings for 2016, BCBS said in August 2015 that, contrary to industry expectations, ACA customers “continue to be unhealthy and use more health care services than expected.” The changes were needed because claims and expenses were higher than premiums, the insurer said.

“While the ACA has improved the availability of healthcare, it has done little to address the underlying costs of care and so far has resulted in skyrocketing premiums,” BCBSNC said in a statement e-mailed by Borman to Bloomberg BNA Feb. 11.

“Consistently losing money on these plans ultimately puts all of our customers at risk,” according to the insurer. “We are doing everything we can to participate in the exchange, but must evaluate the sustainability and affordability of any plans we offer our customers for 2017,” the Blues plan said.

State Compliance Probe Announced

In another development, the state Department of Insurance announced Feb. 11 that it was launching a investigation into “ongoing payment and enrollment problems” with BCBSNC customers. Since Jan. 4, the department said, it has received more than 1,000 complaints from the insurer's customers related to issues such as overbilling, inability to verify effective coverage and lack of a way to pay premiums due to company system errors.

To contact the reporter on this story: Andrew M. Ballard in Raleigh, N.C., at aballard@bna.com

To contact the editor responsible for this story: Brent Bierman at bbierman@bna.com