Blue Cross and Blue Shield of North Carolina, the state's larges health insurer, has agreed to refund $156 million to 215,000 individual policyholders, in response to changes due to the new health reform law, the News & Observer reports.
To pay the refund, Blue Cross will siphon off reserves that were set aside to pay future healthcare for current policyholders, Associated Press reports.
Blue Cross is being forced to pay the refunds because state regulators discovered the insurer was collecting reserves to pay claims beyond 2014, although many plans now in effect will cease to exist in their current form in 2014. North Carolina Insurance Commissioner Wayne Goodwin noted, "Since the passage of the federal health reform law we've ramped up our interactions with the insurance companies we regulate."
The refunds will equal about 1.5 months of premiums for Blue Advantage customers. Blue Cross will mail the checks by the end of the year, reports the News & Observer.
The reserves being refunded are parts of the consumers' premiums that the insurer set aside in early years of a policy to keep monthly payments stable over the life of the policy, even as the person's medical bills grew.
Blue Cross group policies don't use such a reserve, according to company spokesman Lew Borman.
The refund plus a lower rate increase could help burnish the health insurer's image and deflect criticism that it controls too large a share of the state's market for individual health coverage. The moves might also help it ward off closer scrutiny of its rates.
Even critics were impressed. "It's a pretty big deal," Adam Searing, project director of the N.C. Health Access Coalition in Raleigh, a consumer advocacy group that often attacks Blue Cross rates and policies, told the News & Observer. "It signals that Blue Cross is looking at its nonprofit obligations more than it has in the past. That's refreshing."
To learn more:
- read the Associated Press article
- see the News & Observer story
- here's the USAToday story
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