Blue Cross Plans To Be Discontinued – “Affordable Care Act” Backlash

Blue Cross Blue Shield of Texas Deems Certain Plans “Unsustainable” Due to Losses Caused by Affordable Care Act

DontComply has discovered an internal email from Blue Cross and Blue Shield of Texas that was sent out to insurance agents on 07/23/2015. If you have a Blue Cross and Blue Shield plan in the state of Texas, this information affects you more than others. There is a big change coming down the pipeline from Blue Cross corporate for 2016 plans and you might already know which law is at fault. I’ll get to that after we go over the changes.

Blue Cross Blue Shield of Texas is going to be discontinuing PPO health insurance plans for the 2016 plan year. At the time of writing, there are 367,000 members on the Blue Cross PPO plans who will have their plan discontinued in 2016. For those not aware, most insurance companies have typically offered PPO or HMO plan choices for a long time now… at least as far back as I can remember. HMO plans or “Health Maintenance Organization” Plans require that you choose one primary doctor. If you want to go anywhere else, you must first obtain a referral from the your PCP (Primary Care Physician). With a PPO plan, you can go to any doctor at any time that accepts the PPO network. PPO is the better option for most although it does come with a higher price-tag. If you have been on a PPO style plan and are forced to downgrade to something like an HMO, you will not be happy I can assure you.

What reason does Blue Cross cite for their discontinuation of all these PPO plan options in Texas?

CLAIMS!

What is a claim? Every time you go to the doctor, a claim is filed. Blue Cross Blue Shield has paid out over $400 Million in claims over what they took in as premiums. That was only in 2014. Blue Cross mentions that these losses are “unsustainable” and of course they are right. If I was losing $400 Million in one year I would look at it in a similar way.

They have discovered that the PPO Plan strategy is unsustainable at an affordable price due to Anti-Selection. Anti-Selection is defined as:

“The tendency of those in dangerous jobs or high risk lifestyles to get life insurance.”

In the past this phrase would have meant much less due to underwriting. In the underwriting process, insurers had the choice to deny applicants based on health history. Now due to the “Affordable” Care Act, insurers have no choice but to accept every single applicant. Those who can’t afford the insurance are subsidized by the government (given money that is free to them to purchase insurance with). This sounds like a wonderful idea if you do not value free-markets or any kind of logical world where competition is allowed and encouraged.

The “Affordable” Care Act is an attack on the current insurance industry and free trade. The majority of Blue Cross Blue Shield branches are considered non-profit but even they can’t keep a plan that looses $400 Million in one year. The multitude of promises from the leader of this nation, saying that you could “keep your doctor” and “keep your plan”, were exposed as lies from the start of this catastrophe. We are seeing even more ill effects from this “Care” Act as it was called so deceptively. It was understood that Americans would not jump at the prospect of socialized health care, so the plan appears to be more in line with the Trojan Horse. Attack and cause collapse/chaos from the inside.

At every turn the government aligned with this ridiculous law are cornering the healthcare market until you have no choice but to choose the “better and improved” public plan option. They have already proved their reach with these unconstitutional tax penalties for the uninsured. Even further is the way that although Blue Cross is being forced to drop their PPO plans due to losses, they can’t promise that a new and similar plan will even fill it’s place. Why? They are waiting on approval from guess who? The government:

“We intend to offer other products, on and off the Marketplace. A new product has been filed that we believe will give you a flexible choice for your clients. We will be able to share information about that product if and when it is approved by the Centers for Medicare & Medicaid Services (CMS) closer to open enrollment.”

This law is a train-wreck and I suspect that this is only one of many issues we will see continue to arise. If you are on a PPO Plan from Blue Cross and Blue Shield, keep a close eye on this come October. October starts the yearly Open Enrollment period when the government ALLOWS you to switch plans. If you are not within the income levels that make you eligible for a subsidy, remember that you do NOT need to use the .gov website. You can apply directly through an insurer. Don’t give more information to their weakly secured site than is needed.

The Full Text of the E-Mail Communication is Below:

News Alert – July 23, 2015

Individual/Consumer Markets
What to Expect for 2106 Open Enrollment Plans

Click to View Full Memo

On Monday, the Texas Department of Insurance gave Blue Cross and Blue Shield of Texas (BCBSTX) the clearance to announce a change in retail product offerings for 2016. We wanted to share this information with you first.

The retail market has evolved significantly since the opening of the Health Insurance Marketplace in 2014. These changes require BCBSTX to make adjustments that will allow us to continue offering sustainable health insurance options.

There are some changes in the plans we intend to offer in 2016. Most significantly, we won’t be offering our Blue Choice PPO insurance plans for our under 65 block of business going forward.

We intend to offer other products, on and off the Marketplace. A new product has been filed that we believe will give you a flexible choice for your clients. We will be able to share information about that product if and when it is approved by the Centers for Medicare & Medicaid Services (CMS) closer to open enrollment.

We are committed to offering competitively priced individual insurance options in every county in the state, both on and off the Marketplace.

During the months leading up to the beginning of open enrollment, we will talk publicly about the plan transition, and make information available to members and key stakeholders. Below are some details you can use when reaching out to your PPO customers. We recommend that you start having these conversations soon since our proactive outreach could lead to media attention.

We stand ready to assist you and your clients through this transition.

Details for You

• Currently, we have about 367,000 individual Texas members who will have their PPO plan discontinued in 2016. This number fluctuates monthly.
• Around 148,000 Texas members are in grandfathered PPO plans that will not be discontinued. Our Blue Choice PPO network will continue to serve these members.
• This change does not affect our product offerings for our employer group customers or Medicare members.
• Our Blue Advantage^® HMO network will remain. We are working to expand the numbers and reach of providers participating in that network.
• We only had the first full year of ACA claims data for analysis this year, for 2014 claims. In the individual market segment in 2014, BCBSTX paid out more than $400 million more in claims than it collected in premiums. Losses that high are unsustainable, and we have adjusted our offerings – as many insurers have – to be sustainable in the new market reality.
• Not all hospital systems or large physician networks will be participating in our network options for individual members. While this was true in previous years, the number of providers not in network due to the discontinuance may be greater in 2016. We have ensured that we have an adequate network to provide the physicians and hospitals needed to serve our retail members in each market, and we continue to have discussions with additional providers.

Talking Points for Discussing the Changes with Your Clients

Why is BCBSTX discontinuing the Blue Choice PPO?
For the past two years, BCBSTX has been the only health insurer offering an individual PPO plan in all Texas markets. BCBSTX found that the PPO is not sustainable at an affordable price due to anti-selection. BCBSTX will continue to offer other plan options in all 254 counties, on and off the Marketplace.

What will this mean for individual members who currently have the PPO plan?
BCBSTX will be transitioning affected individual members to another plan, so you will not experience a gap in coverage. You will also have the option of choosing a different plan during 2016 open enrollment.

Are there providers who were available under the PPO who will no longer be in network for BCBSTX members on any plan?
There are some providers who were in BCBSTX’s individual PPO plans networks who will no longer be an in-network option for individual members, except those in grandfathered plans. These providers declined to participate in the Blue Advantage network.

If you are seeing a provider who will no longer be available to you through the new plan’s network, BCBSTX will work with you to find a new provider. If you are currently undergoing a course of treatment, BCBSTX will work with you and your providers to minimize the impact to your care, just as if you changed plans for any other reason.

BCBSTX continually seeks opportunities to work with providers to offer the best solutions for our members.

Will there be a rate increase for HMO for 2016?
BCBSTX’s rate filings are currently under review by CMS, so that information won’t be available until rates are finalized and approved. BCBSTX pricing is designed to allow the insurer to offer sustainable products and services to its customers for years to come. A medical loss ratio (MLR) requirement is in place to protect consumers by requiring a high percentage of premiums to go to medical costs. If that requirement is not met, customers may be eligible for a premium rebate.

What would have been the rate increase for PPO for 2016 if it was still available?
A plan’s success requires the right ratios of enrollees to providers, and of the amount of premiums paid in to amounts paid out for care provided. In the 2014 individual business, BCBSTX paid out millions more in claims than it collected in premiums. Losses that high are not sustainable. Like any business, BCBSTX must make necessary adjustments. There were no options that kept the PPO sustainable and still allowed for other plans to be offered across the state.

Why couldn’t you just continue offering the PPO and increase the rate for it?
Under ACA, individual business is rated using a single risk pool, meaning all individual plans had to be looked at together. This means BCBSTX couldn’t just look at the pricing of the PPO separately. If BCBSTX had kept both the PPO and HMO, it would have added dramatic costs for every member with an individual plan.

Is group subsidizing individual business?
The group line of business operates separately from the individual line of business. BCBSTX’s group rates are based on expected cost of doing business for 2016 for group business.

What can I do now?
This announcement does not affect your coverage through the end of the year. There is no need to do anything right now.

Shopping for 2016 plans is expected to open Oct. 10, when insurers are allowed to publicly release the full range of plan offerings for the coming year. You will receive a formal notice from BCBSTX by Oct. 1 that will give you the details of your plan changes.

We encourage you to learn more about how an HMO works. BCBSTX has information about HMOs in the “insurance basics” section of their website at bcbstx.com.

If you have more questions now, you can call BCBSTX at the toll-free Customer Service number listed on the back of your ID card.