Blue Cross previews health-exchange plan rates
Blue Cross and Blue Shield of North Carolina will offer individual health plans through new on-line exchanges ranging from $185 for the lowest-cost plan for 25-year-olds to $947 for the top plan for a 60-year old.
Those rates were among those the insurer included Thursday in a preview of the plans it will look to sell through the online exchange launching as part of the federal health care overhaul.
The insurer is one of three insurance companies that filed to sell insurance through the exchange in North Carolina. Blue Cross said it’s the only insurer that’s offering coverage in every county in the state.
The exchange is an online health insurance store that will open for business Oct. 1, and will close in March. Next year, federal law will require people to have insurance or face a penalty. The penalty starts at $95 an adult, or 1 percent of income – whichever is higher – next year.
According to information released Thursday, a Blue Cross “bronze” plan that covers 60 percent of a non-smoking 40-year-old’s health care costs will average between $235.47 per month for the lowest cost option to $279.66 per month for the most expensive option.
For a “platinum” plan that covers 90 percent of health care costs, the monthly premium average for a non-smoking 40-year-old ranges from $405.88 and $446.02 per month.
There are also options for a “silver” plan that covers 70 percent of health care costs, for a “gold” plan that covers 80 percent, and higher-deductible “catastrophic plans” that are only for people under age 30 or for low-income people who get a “hardship exemption.”
To help people pay for coverage, subsidies will be available from the federal government for people who make one to four times the federal poverty level. The level starts at an annual income of $11,490 for an individual and $23,550 for a family of four.
A 40-year-old earning Durham County’s individual median income -- $33,512, according to the 2007-2011 U.S. Census estimate -- would be eligible for subsidy of up to $378 a year.
That’s according to the Henry J. Kaiser Family Foundation Subsidy Calculator, assuming that the second lowest-cost silver plan would be about $14 greater than the average for the lowest-cost plan released Thursday by Blue Cross.
After accounting for subsidies, Blue Cross officials expects about two-thirds of its individual customers’ coverage costs to increase similarly to increases seen in previous years, or to decrease.
The insurer expects the remaining third to see “fairly substantial increases” due to the requirements of health care overhaul.
Barbara Morales Burke, Blue Cross of North Carolina’s vice president of health policy and chief compliance officer, said she couldn’t compare the rates released Thursday to previous plans for individuals because the plans sold through the exchanges are “richer.”
By law, she said there are benefits required, such as for maternity care, as a core benefit in the individual plans.
She did say that generally, younger and healthier people who won’t qualify for a premium subsidy are most likely to face higher costs. Insurers can no longer consider a person’s health when determining rates, she said, and insurance companies also can only charge the oldest adult up to three times more than the youngest adult.
“Today, we offer a pretty significant discount for people who are younger compared to people who are older,” she said.
In response to a question about costs of individual insurance through the exchange, Gary Claxton, a vice president at The Henry J. Kaiser Family Foundation, a California-based health care policy foundation, said the comparison likely “depends on who you are.”
He added some people currently can’t buy insurance at all. Starting next year, insurance companies can’t deny coverage based on pre-existing health conditions.
A Kaiser Family Foundation analysis of premiums for the largest cities in 17 states and Washington D.C. found a “wide range” of premiums being offered by insurers through the exchanges. According to a summary of the report, the monthly premiums ranged from $201 for the second-lowest-cost silver plan in Portland, Ore., $212 in Albuquerque, N.C., to $390 in New York City and $413 in Burlington, Vt., before taking the tax credit into account.
Most areas included in the analysis will have three or more insurers, and some had 10 or more.
North Carolina had three insurers file to sell insurance through the exchanges, although Blue Cross said it’s the only one that will offer insurance in each of the state’s 100 counties. Not all individual plans that Blue Cross outlined Thursday will be offered in every county.
Peter A Ubel, a professor of marketing and public policy at Duke University, said that without much competition, there’s not much pressure for insurers to lower rates. However, he also said people still have the option to not buy insurance.
“And that will bring some discipline to the market because the penalty is not that large,” he said. “(The penalty) grows, but it doesn’t come close to what health insurance costs.”
Ubel also said the “however many billion dollar question” is who, and how many, will sign up through the exchanges.
Blue Cross and Blue Shield of North Carolina is holding information events in the state where individuals can talk to representatives. It also has a website bcbsnc.com/bluemap that offers information on how health care overhaul impacts. The map will be available online until Sept. 15.
“So we are doing all we can to spread the word, to educate consumers, because there is not a great deal of awareness about the law at this point in time,” Morales Burke said, adding that Blue Cross officials hope that “everyone” signs up for health insurance. She said the health care overhaul is “really predicated” on getting everyone into the insurance pool.