Blue Cross to refund policyholders nearly $156 million in North Carolina

USA Today: "Health insurance regulators in North Carolina have identified nearly $156 million in refunds owed to Blue Cross policyholders because of changes coming under the nation's new health law. Consumers with policies at other companies across the nation also may deserve refunds, says North Carolina Insurance Commissioner Wayne Goodwin. ... The health care law will dramatically change how health policies are sold in 2014, and many plans in effect now will cease to exist that year in their current form. Yet state regulators who scrutinized a recent rate increase request by Blue Cross and Blue Shield of North Carolina say they discovered the insurer was collecting reserves to pay claims beyond 2014. … The result: Blue Cross has agreed by year's end to send refunds to more than 215,000 North Carolina policyholders with individual plans in force on March 23 — the date the new health law was enacted" (Young, 9/20). 

The Associated Press/Businessweek: "Individual policyholders will get back the equivalent of one and a half months of premiums. The average refund will be about $700 and should be paid before the end of the year. The company also said the state Insurance Department approved an overall 5.3 percent increase in rates for its Blue Advantage policies, less than the 7 percent Blue Cross had requested" (9/20).

Durham Herald Sun: Blue Cross President Wilson "cast the decision in terms of wanting to help consumers. … The insurer had recently come under fire in a Consumers Union report for setting aside $1.4 billion in surplus even while it raised premiums for consumers. In 2010, Blue Advantage rates increased by 12.24 percent, and Blue Options HSA increased by 3.22 percent. … Blue Cross has also announced this year that it plans to cut administrative costs by 20 percent by 2014 as well as outsource and cut 80 to 90 positions related to claims processing by May 2011 to save the insurer up to $2.1 million annually. … The insurer posted profits of $107.3 million in 2009" (Chen, 9/20).

Winston-Salem Journal: "The refunds will be paid at a time when more people are depending on individual health-insurance policies, either because their job has been eliminated during the recession or their employer chose to drop coverage to reduce expenses. … Blue Cross has more than 3.7 million members statewide, of which about 300,000 are individual policyholders. According to analysts, Blue Cross has the dominant market share for individuals" (Craver, 9/21).

Modern Healthcare: "Refunds do not apply to employer-sponsored policies" (Galloro, 9/20).

The News & Observer: "The refund and lower rate increase could help polish Blue Cross' image and deflect criticism that it controls too much of the state's market for individual health coverage. The moves also could help Blue Cross fend off increased regulation, including tougher scrutiny of its rates. … [O]ne of its toughest critics said Monday's announcement was a positive and significant step. It also could force other insurers to follow suit. 'It's a pretty big deal,' said Adam Searing, project director of the N.C. Health Access Coalition in Raleigh, a consumer advocacy group that frequently attacks Blue Cross' rates and policies. 'It signals that Blue Cross is looking at its nonprofit obligations more than it has in the past. That's refreshing'" (Wolf, 9/21).

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This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.