NC Blue Cross Misses Age, Sales Targets For ACA
RALEIGH, N.C. — North Carolina's largest health insurer signed up older, sicker and fewer customers than it forecast in the first year of selling coverage on a statewide marketplace required by federal law, the company said Thursday, foreshadowing that it might seek higher premiums for the policies next year.
"We know we didn't get the mix that we wanted," said Barbara Morales Burke, vice president of health policy for Blue Cross and Blue Shield of North Carolina. "Because we got a different mix, we think they will be more expensive than what our rates accounted for."
Consumers have paid premiums for 232,000 Blue Cross policies sold through the marketplace created under the federal overhaul law called the Affordable Care Act during the enrollment period ending in March, Morales Burke said.
The number was at least a third lower than the company projected, in part because of late action by President Barack Obama allowing people to keep existing insurance plans, Morales Burke said. It was more than a month into the six-month sign-up period that Obama decided to allow a one-year extension to people whose individual policies were being canceled because they didn't cover basic required benefits such as pre-existing conditions or hospitalization.
More than half of the 243,000 Blue Cross policyholders facing cancelations chose to keep their old plan. Many were younger, healthier people with policies that covered less than the ACA required and cost less. While they remained Blue Cross customers, they didn't move into the separate pool of risk and revenue created by the ACA marketplace, Morales Burke said.
Blue Cross anticipated that half of those enrolled in policies sold on the exchange would be 34 or younger. Instead, that age group accounted for 32 percent of the policies. That was slightly below the average for the 34 states that had the federal government run their insurance marketplace. While Blue Cross expected 15 percent of new customers to be 55 or over, it got nearly twice that proportion.
"That will certainly play into increasing premiums in the future," said Katherine Restrepo, a health policy analyst at the conservative John Locke Foundation.
But since 90 percent of Blue Cross' ACA customers received subsidies to help buy coverage, higher premiums will be paid more by taxpayers than policyholders, said Restrepo and Adam Linker, a health policy analyst with the liberal North Carolina Justice Center.
"They have an incentive to set rates as high as the market will allow, and so they want to prepare everyone for justifying larger premiums," Linker said.
Any premium increase to ACA policies for 2015 would not affect other polices that Blue Cross sells to individuals or groups, Morales Burke said.
Only Blue Cross offered insurance plans statewide on the exchange. Coventry Health Care, a division of industry giant Aetna Inc., sold policies to consumers in more than a third of the state's 100 counties.
Aetna declined to say how many North Carolina marketplace policies it sold, spokesman Walt Cherniak said. The U.S. Department of Health and Human Services reported last week that 357,584 North Carolinians signed up for a marketplace insurance policy.