Rate hike would affect 53000 Blue Cross customers: RV Vehicle Broker and Cheap Deductible

Rate hike would affect 53000 Blue Cross customers

Rate hike would affect 53,000 Blue Cross customers: David Pierce
Author: Individual Health Insurance

Blue Cross of Northeast Pennsylvania is seeking approval from the state Insurance Department to substantially raise health insurance rates for five programs, impacting 53,000 customers.

Increases sought by Blue Cross range from 19.9 percent to 48.9 percent. But only about 9 percent of Blue Cross’ 600,000 customers are affected. None involve any employer-based Blue Cross plan, says spokesman Anthony Matrisciano.

Mastrisciano said heavy utilization of services and advances in expensive technology have driven up costs.

“In all of these plans it’s related to the unrelenting increase of health care costs,” said Mastrisciano. “The technology and the use of the technology is the big driver of the costs.”

The proposed increases, which could go into effect Jan. 1, 2010, include:

* A 19.9 percent hike for the 37,000 customers of Security 65, a supplement for Medicare consumers.
* A 48.9 percent hike for the 7,000 customers of Blue care Cooperative. “This tends to be used by older, less healthy” consumers who heavily utilize services, said Mastrisciano.
* A 27 percent increase for 5,000 consumers of Special care, a program utilized by low-income consumers including children whose parents decided not to enroll them in the government’s CHIPs program.
* A 22.8 percent rate hike for 3,200 subscribers of Blue care Major Medical, a supplemental insurance plan.
* Blue care HMO Individual Conversion seeks a 27.7 percent increase 12.2 percent without prescription drug coverage) for 1,042 customers. Employees of group plan customers are typically offered this option for continued coverage when an employee terminates employment.

Blue Cross of Northeast Pennsylvania serves a 13-state region that includes Monroe and Pike counties.

Blue Cross, a not-for-profit corporation, paid out $1.07 in services for every dollar it received in premiums between 2004 and 2008, according to spokeswoman Michelle Davidson. Blue Cross was able to do this because it made high earnings on stock market investments in the 1990s and early this decade, she said.

The local Blue Cross surplus stood at $462 million in December 2007, but fell $264 million as of March 31.

“That helped cushion our position,” she said. “We’re able to use that to subsidize the rate increases. We don’t have to raise them as much as we need to to cover our costs.”

Blue Cross is working with consumers, providers and doctors on “efficiencies” to lower costs, she said. This includes directing customers to less costly plans, Davidson added.

Blue Cross is required by insurance regulations to maintain a designated surplus level for each product as a hedge against an unforeseen epidemic or other health crisis, Davidson and Mastrisciano said.

They said they couldn’t provide a gross payroll figure for Blue Cross but estimated 2008 medical claims at $1.3 billion.

Blue care Cooperative, the plan for which the highest increase is proposed, is typically offered to high risk individuals who cannot obtain coverage in the commercial market. The Blues are mandated by the state to offer it.

Blue Cross favors legislation that would require all Americans to obtain health insurance and require all insurance companies to share the burden of covering those with expensive pre-existing conditions.

“We’re completely in favor of health care reform,” Davidson said. “It would level the playing field for all.”

Blue Cross opposes the so-called public option whereby Congress would authorize a government-backed coverage program aimed at keeping overall rates down through competition. Two government insurance programs - Medicare and Medicaid - only cover 70 percent of medical costs, Matrisciano said, resulting in hospitals and doctors charging other insurance companies more to make up the difference.

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Rate hike would affect 53000 Blue Cross customers

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