Blue Cross and Blue Shield of Nebraska’s members statewide will see an average premium increase of eight to nine percent in 2015—with some employer groups and Medicare Supplement customers experiencing flat or even decreased monthly premiums.
Stability in the employer group market, where both small businesses and BCBSNE’s larger employer groups will see an average premium increase of 5% or less, will contribute to those customers experiencing a relatively flat premium adjustment. Nearly 80% of BCBSNE’s business is in the group market.
“With the instability in health care and in the health insurance market over the past few years with the Affordable Care Act (ACA), we are glad to report that premiums are relatively stable for our employer groups next year,” said BCBSNE vice president Dan Alm. “With that segment being the largest block of our business across the state, that’s great news.”
While an increase of less than 5% has been filed for Medicare Supplement plans, most of the fluctuation in 2015 health insurance will be with individual customers who purchased ACA-compliant insurance on their own for 2014—many of them through the government’s Health Insurance Marketplace.
A variety of factors attributable to the ACA—such as required expanded benefits, higher use of medical services, guaranteed issue requirements, the existence of two insurance rating pools and ACA-related taxes and fees—will contribute to a 19.5% average premium increase for 2015 ACA plans.
“We realize that the premium increase on the individual side of our business is substantial, and we don’t want to create undue hardship on our customers,” Alm said. “However, the medical losses we are seeing on individual plans, which are driven by usage of medical services and costs of those services, are some of the highest we have seen in years.
Alm added that BCBSNE’s decision to allow current customers to keep their existing non-ACA plans in 2014 was good from a member choice standpoint, “but it turned out to have a higher impact on premiums than we anticipated—due to much higher claims than expected,” he said.
Alm also pointed out that the termination of CHI Health facilities and UniNet physicians—with costs 10 to 30 percent higher than other providers—contributed to some reduction in self-insured group plan premiums, and it made the individual rate increase lower than it would have been.
“Because of high claims and utilization on the individual side, we were looking at a rate increase close to 30 percent before the CHI termination,” Alm said.