It was widely reported last week that BlueCross plans to raise rates on individual health insurance policies an average of 36 percent in 2016. That is a big increase, which caught the eye of many health care consumers.
Following are three things to bear in mind.
1. It is only for under-65 individual plans. This announcement only applies to under-65 individual policies from BlueCross. If your employer offers a BlueCross group plan, its cost may still go up. But, its increase has nothing to do with this announcement. The same is true for Medicare-related policies from BlueCross. The cost of those may go up, but this particular announcement has nothing to do with that.
Why? Because BlueCross puts under-65 individual policies in a separate “pool” from group policies and Medicare-related policies. It evaluates each of its “pools” individually and gives increases based on the costs it experiences for each “pool.”
In this case, BlueCross is saying that it misjudged how expensive the claims would be for people who signed up for under-65 individual policies. As a result, it lost a lot of money over the past few years because the premiums they collected from this pool did not cover the claims that BlueCross had to pay.
Since BlueCross cannot go on losing money every year, it is raising rates to bring the premiums it receives from the under-65 pool in line with costs.
2. There are other options. (continue reading)