Although the health reform law has many benefits, including transforming the insurance industry, the chief executive of Blue Cross Blue Shield of North Carolina said it also will lead to increases in premiums.
The reform law will help millions of new consumers gain health coverage. While great for Americans, "it will come at a cost," CEO Brad Wilson said at the Triad Association of Health Underwriters' monthly meeting, according to a Greensboro News & Record article.
For example, BCBSNC spends 87 cents of every premium dollar for its members' healthcare, but the reform law's changes will cause the insurer to increase its medical-loss ratio to about 90 cents. Since BCBSNC will lose those 3 cents per dollar, it will be forced to raise premiums, Wilson said.
And the reform law's subsidies, which are meant to make insurance more affordable for consumers, won't help insurers offset their losses in premium revenue. Wilson even said it wouldn't surprise him if an insurer implements a premium hike of as much as 50 percent, reported The Business Journal.
What's more, according to Wilson, the reform law's requirement that insurers provide insurance for all consumers, even if they have pre-existing medical conditions, will lead to higher premiums to compensate for the higher costs of insuring sicker members.
But Wilson remains hopeful about the future of the post-reform industry, particularly insurers' efforts to collaborate with providers to cut costs. "I truly believe we are at the beginning of a long journey," he said.