mchen@heraldsun.com; 419-6636
CHAPEL HILL -- With health care reform at the front and center of the national debate, many are turning a critical eye toward Blue Cross Blue Shield of North Carolina, the largest health insurer in the state, to highlight existing problems with the health care system.
One of most glaring problems from the consumer's perspective: The increase of premiums by some 20 percent to 30 percent for some in the past year, seemingly at random.
Rachel Knowles, a 35-year-old who works for a Durham nonprofit, has an individual Blue Advantage plan and said her premium jumped by 22.3 percent this year.
Knowles takes a medication similar to Prevacid for stomach acid. She started her Blue Advantage plan two years ago and found the monthly cost to be too high, so she switched to a different option with a higher $2,000 deductible.
Unfortunately, the plan didn't cover her medication in full, and with her new rate increase this year, she now pays $389 a month plus $50 every other month for her prescription.
"I'm so upset with the health care situation right now that there are times when I can't face it," Knowles said. "It's one of those hot button issues for me."
In an informal survey on its blog, the N.C. Justice Center, a Raleigh progressive advocacy group, found that many customers with Blue Cross reported 20 percent to 30 percent increases, some affecting infants and toddlers, others affecting young women.
Blue Cross has the lion's share of the market for individual health insurance in the state, with 96.8 percent of the premiums in 2008.
The insurer also received the bulk of the written complaints on rate increases filed with the N.C. Department of Insurance last year, with 92 total complaints from the beginning of 2009 through last week.
The state agency had also approved a 12.24 percent increase on Blue Advantage for 2010.
The policy is further sectioned into Plan A, with the greatest coverage, lowest deductible and highest premium, as well as the lower plans, Plan B and Plan C. Information on the approved rate increases for those plans were not available since they are protected industry information, said NCDOI.
Adam Linker, a health care expert with the Justice Center, said it's out of the ordinary for people to see 20 percent to 30 percent increases and even higher in some cases.
"A number of people have just thought it was a mistake," Linker said. "They were told two explanations. The most common is that [Blue Cross is] creating a new tier for small children, and they added a new vision benefit."
Linker said premiums are supposed to be based on general factors of risk. "So even if something happened [to your health], it wouldn't be the case that if you use more health care that your premiums go up," he added.
According to Blue Cross' vice president and chief actuary, Patrick Getzen, what drives typical rate increases is the age of a person. The older a person gets, the more their claims will increase.
One thing Blue Cross changed this year was the age brackets for children. Previously, the insurer rated children up to age 18 in one bracket.
"What we found is that that caused some of our female customers who were aging from 18 to 19 years old, they saw a very large increase," Getzen said.
So this year, Blue Cross split the "age band" for children into four separate groups, birth to 1 year old, 2-12 years old, 13-16 years old and 17-20 years old, that should only result in one-time adjustments as the customers age up into different bands, Getzen said.
But that still does not explain a case like Knowles, an adult woman who is for the most part healthy and stable.
When asked about her situation, Blue Cross spokesman Lew Borman said they could not offer a thorough explanation without more information. What kind of Blue Advantage plan does she have? Does she have maternity coverage? Has she considered the health savings account product? -- were some of the questions posed about Knowles.
"The rates for individuals can vary because of a number of factors that affect the potential medical costs of those groups," Borman wrote in an e-mail.
Knowles said she's not on a plan with her employer, Communities In Schools, because she only works there part time. Her husband, a novelist, is also on an individual plan with Blue Cross.
"In the nonprofit community, health care costs are extremely burdensome," Knowles explained. "When you work at a nonprofit, you're trying to use as many resources as possible to alleviate the cause that you're working for."
Knowles said she'd like to start shopping around for another plan.
Linker said part of the reasoning behind the rate increases could be to bolster the company's bottom line ahead of the coming reform.
"All of the insurance companies are sort of playing the same game of being nervous about where reform is going," he said. "Right now, people call us and there's essentially nothing we could do. You could have premiums skyrocket and you have to pay them or lose your insurance."
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BCBSNC RATE INCREASES
Blue Cross Blue Shield of North Carolina recently sent some customers eye-popping 20 percent to 30 percent rate increases on their policies. Here are some basic stats on what's going on:
- Blue Cross was approved for a 12.2 percent increase for 2010 for Blue Advantage, a popular plan with the insurer.
- The N.C. Department of Insurance has received 92 written complaints about rate increases at Blue Cross since 2009. By contrast, the agency has received 13 complaints about United Healthcare, five for Aetna and two for Cigna.
- Some of the rate increases were the result of the new "age bands" BCBSNC implemented this year. Whereas before, children up to 18 years old were in one group, the new age bands group children into 0-1 years old, 2-12 years old, 13-16 years old and 17-20 years old. As kids age into older brackets, they should see a "one-time adjustment" to their policy rates, according to Blue Cross."
