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Analysis

Blue Cross North Carolina to Cut ACA Premiums for 2019

By John Commins  
   August 28, 2018

Depending upon the region, Blue Cross NC said, ACA premiums will fall by as much as 22%, or rise by as much as 9.5%, with a statewide average drop of 4.1%.

For the first time since entering the Affordable Care Act marketplace in 2014, Blue Cross and Blue Shield of North Carolina will reduce premiums statewide in 2019 for most of its 475,000 Obamacare customers.

Depending upon the region, Blue Cross NC said ACA premiums will fall by as much as 22%, or rise by as much as 9.5%, with a statewide average drop of 4.1%.

The North Carolina Department of Insurance approved the plans this month.

The health insurer's ACA plans in the Triangle around Raleigh, Durham and Chapel Hill will see an average premium decrease of 21% in 2019, which translates into a pre-subsidy average of $140 a month under a new provider agreement with UNC Health Alliance.

"Our agreement with UNC Health Alliance allows us to offer similar plans, but at a significantly lower cost," Blue Cross and Blue Shield of North Carolina CEO Patrick Conway said in a media release. "What makes this possible is that UNC agreed to partner with us on an arrangement where we're both responsible for the quality and total cost of care."

The health insurer is ending its ACA Blue Local partnership with Duke Health and WakeMed, which now has about 50,000 customers in 12 counties. Blue Cross NC said the new plan will offer "similar benefits."

"We will work with our current Blue Local customers to find in-network providers, and make sure they are getting the care they need throughout this transition," Conway said.

Blue Cross NC said it has lost more than $450 million during the first three years of the ACA, but remains committed to offering coverage in all 100 of North Carolina's counties.

On average, premiums will fall by $1,680 a year for ACA customers in the Triangle. Premiums are expected to drop by about 16% for ACA members in the Charlotte and Gastonia areas, which with the Triangle comprise 40% of ACA members in North Carolina.

Statewide, Blue Cross NC said the rate decrease translates into a $120 million cut in healthcare costs in 2019.

'Wait and See'
 

Blue Cross NC representatives did not specify how they plan to cover the $120 million savings. Under state regulations they don't have to disclose cost sharing or benefits packages before the enrollment period opens this fall, says Brendan Riley, a health policy analyst with the North Carolina Justice Center.

"It's wait and see at this point, but overall it's promising to see that premiums can actually come down in some areas," Riley says. "We know they are ACA compliant plans so they are full comprehensive coverage. They meet the essentially health benefits requirements, so it's not like the Trump-endorsed alternatives such as short-term plans."

Riley says the savings likely will come from a narrower provider network, particularly in the Triangle and Charlotte areas. "There is a risk that by narrowing the network some consumers may have a harder time finding the doctors they need, especially specialists, but we don’t know that for certain yet," he said.

Blue Cross NC said the decision to partner its ACA plans with UNC Health Alliance in the Triangle "was the result of a competitive process between the area's hospital systems. The decision was based on which system could provide customers with the lowest rates, while continuing to offer them access to the highest quality care."

Matt Ewend, MD, a neurosurgeon and president of the UNC Physicians, says the new arrangement with BlueCross NC "will be a stretch, but we're pushing ourselves to do this."

"There is a realization from our organization and Blue Cross that we can't just keep spending more and more," Ewend says. "We decided as an organization that, instead of sitting back and letting this happen around us, we wanted to get out in front of this. We think in five years from now everyone will be doing this."

"A tight partnership with Blue Cross is step one. The second thing is we have to reduce the overall cost of care by getting patients to the right site and reducing unnecessary variations in care. It's preventative care over fixing the problem."

"The third thing is we have to partner with the patients," Ewend says. "We need folks to understand that they're signing up for health insurance that is less-expensive than it was before, which is remarkable, but they have to be part of the solution to make that possible. So we have to engaged them in their own health."

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.


KEY TAKEAWAYS

For the first time since entering the ACA marketplace, Blue Cross NC is cutting premiums. Statewide, premiums will drop by an average of 4.1%.

The insurer is ending its ACA Blue Local partnership with Duke Health and WakeMed.

Patient advocates optimistic, but awaiting coverage, network, cost-sharing details.


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