- Associated Press - Monday, June 1, 2015

RALEIGH, N.C. (AP) - North Carolina’s largest health insurer said Monday it wants to raise rates by an average of almost 26 percent next year on broadly subsidized policies sold to individuals, nearly double this year’s allowed 13.5 percent increase.

Blue Cross and Blue Shield of North Carolina said it is seeking the increase for 2016 as more people are covered as a result of President Barack Obama’s federal health insurance overhaul and medical costs continue rising. Consumers insured through their employers and those continuing coverage under policies taken out before the federal Affordable Care Act took effect will not be affected.

Blue Cross rivals Aetna and Celtic Insurance Co. projected medical costs rising about 7-8 percent, according to documents they filed with the state Insurance Department in May for policies taking effect in 2016.

That’s after consulting firm PwC projected medical costs would rise 6.8 percent in 2015 due to expensive new innovations and more people being covered and receiving care.

Blue Cross said about four-fifths of its requested rate increase is the result of higher-than-expected medical costs incurred in 2014 as newly covered consumers poured into providers for treatment, especially for cancer and heart conditions.

“I think we could all agree that more North Carolinians having health insurance coverage is a good thing, but we need to keep in mind that it does come at a cost,” said Patrick Getzen, Blue Cross’s vice president and chief actuary.

The Affordable Care Act changed how health insurance is sold by requiring companies to accept anyone without ruling out some because of existing conditions or healthiness. Policies also were required to cover 10 essential elements including hospitalization and prescription drugs. In return, most adults are required to have coverage or pay a penalty.

Blue Cross and Blue Shield of North Carolina in 2014 was the only insurer to sell plans on a federally run online insurance marketplace to residents of all 100 of North Carolina’s counties. With more than 3.9 million members in North Carolina, the insurer’s policies on the individual market represent a fraction of its overall business.

United HealthCare and Coventry Health Care also offered marketplace policies in North Carolina this year and plan to do so again in 2016. Coventry, a division of Aetna Inc., requested rate increases of between 17.2 percent and 25.8 percent. UnitedHealthcare wants an average 12.5 percent rate increase.

Humana, which also plans to sell policies next year on the online insurance exchange, is seeking a price hike averaging 11.3 percent.

Any individual’s actual rate increase for each policy will be affected by factors including age, location and plan level.

More than 90 percent of those who buy coverage through the exchange receive federal subsidies that help them pay the costs. The U.S. Supreme Court is expected to issue a ruling later this month in a case that could eliminate subsidies for consumers in states like North Carolina that left operating the exchange in the hands of Washington.

Getzen said as many as 20 percent of Blue Cross’s individual policies sold to meet Affordable Care Act requirements were canceled by customers who paid an initial premium, received treatment for their ailments and then quit paying.

“This is an unintended consequence of the way the law is written,” he said.


Emery Dalesio can be reached at https://twitter.com/emerydalesio.

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