Blue Cross Blue Shield North Carolina posts 4% rate decrease for 2024

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The North Carolina Department of Insurance has approved a 4% average rate decrease for individual customers and families who enroll in Affordable Care Act plans in 2024, according to Blue Cross and Blue Shield of North Carolina.

This average rate decrease will lower total premiums by an estimated $130 million, said Blue Cross NC.

President and CEO Dr. Tunde Sotunde said that, despite the rising costs of healthcare and overall inflation in the U.S., Blue Cross NC's rates for individual ACA health plans are 5% lower than they were in 2018.

"As the only not-for-profit insurer in all 100 counties of the state, we are bringing savings directly to our members to make their healthcare more affordable," Sotunde said.

WHAT'S THE IMPACT?

Rates are largely determined by the cost of members' collective medical and pharmacy claims, and vary based on location, age and plan. For individual ACA customers, customers' premium amounts depend on federal premium subsidy levels, which will be determined by the Centers for Medicare and Medicaid Services in October.

Blue Cross NC cited a number of factors that may significantly impact 2024 rates, including its Blue Premier initiative, which reduces costs by paying hospitals and doctors based on improving patient care, rather than the number of procedures or tests performed. Now with about 1.4 million members, the organization said the program has lowered healthcare costs by about $650 million since it began in 2019.

Meanwhile, in an effort to address the rising cost of specialty drugs, Blue Cross NC said it has worked to negotiate lower costs with drug manufacturers to ensure its plans cover the most effective drugs at the lowest cost. 

While pharmaceutical costs in the U.S. grew 9.4% in 2022, Blue Cross NC held down the overall pharmacy trend for its individual ACA market to 0.7% in 2022 and to 2.9%, so far in 2023, according to the company's internal data.

In 2024, Blue Cross NC will continue to offer its broad network preferred provider organization plan, Blue Advantage, in every county in the state. And in many areas, it's collaborating with local health systems to offer plans that feature a smaller, curated network of high-quality providers, at a lower cost than a similar broad network PPO plan.

In the Triad, Triangle and Charlotte regions for example, Blue Cross NC will continue to offer Blue LocalSM and Blue HomeSM plans; these plans' average monthly rates are $100 to $200 lower than a similar PPO plan. And in the Wilmington, Hickory and Gastonia areas of the state, the company will continue to offer Blue ValueSM plans, whose average monthly rates are $70 to $90 lower than a similar PPO plan, company data showed.

THE LARGER TREND

About 85% of Blue Cross NC's current customers with individual ACA plans qualify for subsidies for their 2024 plans. Subsidies vary by plan and household income. The federal American Rescue Plan Act expanded these subsidies to more people, lowering premiums to no more than 8.5% of customers' household incomes. In 2022, these expanded subsidies were extended for three years through the federal Inflation Reduction Act.

Blue Cross NC will continue offering renewal of what are considered "transitional plans" in 2024, for both individuals and small groups. These are plans purchased between March 2010, when the ACA was signed, and October 2013 when regulations went into effect. Transitional plans do not meet ACA requirements but are allowed by federal law. The plans cannot be sold to new customers.

In 2022, Blue Cross NC made a play for the mental health space, joining forces with Headway, a company that works with insurers to deliver behavioral healthcare. The collaboration was meant to address what the company sees as a serious problem: a shortage of mental health professionals in the state.

The collaboration came as Blue Cross NC was investing more than $2 million to support 11 community organizations working to improve access to behavioral health services. The initiative is aimed at enhancing access in rural and marginalized communities and in regions of the state designated as Health Professional Shortage Areas.

Twitter: @JELagasse
Email the writer: Jeff.Lagasse@himssmedia.com