Dive Brief:
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BlueCross BlueShield of North Carolina (BCBSNC) is stopping its grandfathered health plans and will transition the 50,000 members on those plans to Affordable Care Act (ACA) coverage in January 2018.
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The grandfathered plans have dropped membership from more than 330,000 in 2010 to about 50,000 today. As members dropped off the plans, they were not replaced by young, healthy people, which means the plans’ member pool “has gotten older and sicker,” said BCBSNC.
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The members moved to ACA plans will likely pay more for insurance, though BCBSNC recently lowered its requested rate increase for 2018 ACA plans from 22.9% to 14.1%, after receiving more data from June and July.
Dive Insight:
When the ACA became law in 2010, BCBSNC allowed members to stay on the same health plans, which was required under the ACA. Over the years, health insurers have dropped grandfathered plans as members have left, creating a unbalanced risk pool.
BCBSNC, which offers ACA plans in all 100 North Carolina counties, said having older and sicker members on the grandfathered plans means it would need to raise rates on customers in that pool significantly in 2018.
This situation is exactly what proponents of the ACA warn could happen if the law is repealed, or the individual mandate is removed. Requiring younger, healthy people to sign up for coverage will even out risk pools and allow payers to have stable premium rates.
BCBSNC said the ACA plans cover more services in most cases, but are also more expensive for members than the grandfathered plans. There are also fewer in-network providers for some customers, because BCBSNC is no longer offering “a broad network product” in ACA plans in some areas of North Carolina.
The payer said many customers who need to transition will qualify for the ACA's premium subsidies to help offset the cost increase in their new plans.
“Comparing current year premiums for grandfathered plans to premiums for an ACA plan next year, young men and women over 50 will generally pay more for ACA coverage, while older men and young women will pay less,” Gary Bolt, vice president of sales and marketing for BCBSNC, wrote in a blog post.