Dive Brief:
- Blue Shield of California has decided to remove two Stanford hospitals from its PPO network due to high costs as of Jan. 1. Stanford Hospital and Lucile Packard Children's Hospital will no longer be part of the company's individual and family plan networks. Those in traditional employer group plans will not be affected by the changes.
- Some enrollees told the San Francisco Business Journal despite this measure, their premium rates are going up, some as much as 29%, while their access to quality care is decreasing.
- Blue Shield spokeswoman, Mia Campitelli told the publication, "We understand that some might be upset with our rates, but they accurately reflect the cost of healthcare in the...area."
Dive Insight:
The company said in a statement, "Unfortunately, Stanford did not share in Blue Shield's affordability goals and rates would have been even higher had they been included." The company said pricing varies by region, with higher prices in Northern California.
The Covered California version will see higher rates in platinum and gold plans versus silver and bronze options. According to Blue Shield, 79% of enrollees in the PPO will have a premium increase of less than 10% and 12 of 19 regions will have an average rate increase of less than 9%.
An article in Forbes this June said big insurance rate increases are expected - especially among insurers with the most ACA enrollment. One example of 2016 rate increases include CareFirst Blue Cross of Maryland asking for a 34% rate increase for its PPO plan and a 26.7% increase for its HMO.
The article points to several reasons for the higher rates including lower than expected Obamacare enrollment levels, health plans not having complete data, and concerns the administration will not follow through on the promise to pay off most insurers' losses through the "3Rs" reinsurance program.