Blue Cross & Blue Shield of Rhode Island (BCBSRI) has filed a request with the Office of the Health Insurance Commissioner (OHIC) for an average rate increase of 4.4 percent for Plans for Individuals and Families (also referred to as Direct Pay), down from the 8.1 percent requested in 2010. To help those hardest hit by the state's ongoing economic challenges, BCBSRI also pledged $4.5 million to fund their AccessBlue program, which helps eligible members pay their health insurance premiums. Twenty-eight percent of BCBSRI Direct Pay members currently take advantage of the AccessBlue program, which had been on track to run out of funding in 2012.
"Our Direct Pay members are among the state's most vulnerable," said Laura Calenda, BCBSRI spokeswoman. "They aren't eligible for either employer or government-sponsored health insurance—and they often struggle to pay their premiums. BCBSRI felt it was important to make healthcare more accessible and affordable for these members by funding the program through the end of 2013 when federal subsidies will kick in."
According to Calenda, BCBSRI has also undertaken a number of aggressive efforts to improve both the quality and affordability of local healthcare. Those efforts have included the rollout of a new drug formulary that encourages the use of high-quality, but lower cost, generic drugs or over-the-counter medications; significant changes in the way BCBSRI pays hospitals; and investment in new care models such as the patient-centered medical home. In fact, the company has successfully reduced administrative expenses by $35 million and medical claims costs by $100 million over the last two years without impacting quality of care or customer service.
These and other cost-savings efforts are reflected in the rate filing. Given the state's ongoing economic challenges, the filing does not reflect a contribution to reserves, which are monies set aside to ensure BCBSRI's ability to pay member claims in the event of significant economic downturn or catastrophic event, such as a hurricane. BCBSRI's reserves remain below the 20 percent reserve level of most other regional health insurers and are equivalent to only $592 per member—less than the cost of a single emergency room visit. The filing does include, however, 2.6 percent to pay for the state premium tax and assessments, which is actually 1.2 percent less than needed to pay these state-mandated taxes and assessments.
Calenda added that BCBSRI plans to introduce a new product to the Direct Pay market that will include improved plan features and more affordable premium rates. The new plan is a low-cost option designed for individuals, and provides 100 percent coverage for preventive medical and dental services, as well as a $100 fitness center reimbursement incentive. In addition, BCBSRI is introducing a new program on all Plans for Individuals and Families that reduces the deductible over time. Further details about these products will be announced in the spring.
If approved, the Direct Pay rates will go into effect on April 1, 2012 for current members and will remain for an 18-month time period—a benefit for the member who will be locked in to those rates for a longer period of time. It also will help BCBSRI move to a calendar year schedule that federal healthcare reform requires beginning in 2014. All plans offer comprehensive coverage for medical care and prescription drugs, as well as access to the largest integrated provider network in the United States with no referrals. Open enrollment for Plans for Individuals and Families will be May 15 to June 15, 2012 for July 1, 2012 effective date. The filing does not affect the rates for Plan 65 or BlueCHiP for Medicare subscribers.
With more than 15,000 Individual and Family plan members, BCBSRI is the only Rhode Island insurer that offers coverage to Rhode Island residents who are not eligible for health insurance through an employer (other than as a self-employed individual), Medicare, or Medicaid. The company also is the only insurer in the Rhode Island market to offer guaranteed coverage, regardless of pre-existing conditions, during its annual open enrollment.
Blue Cross & Blue Shield of Rhode Island is the state's leading health insurer and covers more than 600,000 members. The company is an independent licensee of the Blue Cross and Blue Shield Association. For more information, visit BCBSRI.com and follow us on Twitter @BCBSRI.