DURHAM — Blue Cross Blue Shield North Carolina, the state’s largest health insurer, has announced it will end thousands of so-called “grandfathered” plans at the end of the year.
It’s a move Gary Bolt, vice president of sales and marketing, called “tough news for our customers who love their grandfathered plans.”
The grandfathered plans date back to 2010, when the Affordable Care Act was passed in March of that year. The passage of the ACA allowed certain customers to keep the health insurance they already had instead of transitioning to plans offered through the state’s marketplace.
About 330,000 North Carolinians kept their pre-ACA plans. Over the last seven years, about 280,000 transitioned to plans offered through the state’s insurance marketplace, but 50,000 still have grandfathered plans.
Bolt cited rising costs and a shrinking risk pool as factors in the decision.
“Because no new customers have joined this pool since 2010, the group as a whole has gotten older and sicker. That means they have also become more expensive to insure. And as the number of customers continues to dwindle, the cost to continue to offer the plan becomes disproportionate. We’d need to raise rates for these customers a significant amount to keep offering these plans in 2018,” Bolt said.
For these reasons, Bolt said Blue Cross NC would not renew any grandfathered policies; all non-ACA policies will expire on Dec. 31, 2017.
Bolt said that moving from their old plans to new plans would be a “good news/bad news scenario” for Blue Cross customers.
“The good news is their plan will cover more services, in most cases. The bad news is that this coverage will be more expensive than what many customers are paying today. And some customers will have fewer in-network providers in their new plan,” Bolt said.
Bolt pointed to ACA prohibitions on denying coverage or charging more for “older or sicker” customers as factors driving up costs of insurance plans on the state’s marketplace.
North Carolina’s premiums have risen nearly 40 percent between 2015 and 2016, according to a report for the US Department of Health and Human Services; according to a North Carolina Institute of Medicine study from June, Republican attempts to repeal and replace would further exacerbate this trend.
Blue Cross Blue Shield is the sole provider of health insurance in 95 of North Carolina’s 100 counties (Cigna offers insurance in five Raleigh-area counties). However, a February 2017 Brookings Institute report about competition in the North Carolina marketplace stated that it was “not obvious that most consumers are suffering” financially from lack of options, and that high rates prevalent in the state were due more to “underlying health issues” in the general public than from lack of competition.
Bolt said “many (customers) will pay quite a bit more,” but added that “a portion of our affected customers will qualify for subsidies to offset the cost increase.”
Blue Cross NC will mail notifications to its grandfathered customers in October, Bolt said.
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