BCBS of NC expects $400M in losses after 2 years on ACA exchange

After open enrollment closed Jan. 31, Blue Cross Blue Shield of North Carolina said it expects to lose over $400 million on its Affordable Care Act business for 2014 and 2015, according to The News & Observer.

Here are five things to know about Blue Cross Blue Shield's anticipated losses.

1. The losses exist despite a recent premium rate raise. The insurer raised rates by an average of 32.5 percent for 2016, but the raise has no effect on BCBS' 2015 results, according to the report. The insurer might be able to recover a portion of its losses through federal assistance.

2. The ACA losses started occurring in 2014. BCBS of NC reported a $50.6 million loss in 2014, primarily due to its ACA and Medicare Advantage businesses. Despite $343 million from reinsurance and other federal financial aid programs, the insurer lost a total of $123 million on ACA plans in 2014.

3. BCBS of NC is eliminating sales commissions for agents selling ACA policies. This choice, which was announced during a Jan. 28 webinar, has frustrated a number of agents throughout the state. BCBS was one of the last insurers to offer agent commissions. "We were committed to paying commissions in 2016 until UHC and Aetna stopped paying commissions. We have made this decision to ensure the sustainability of our company for our customers," said an FAQ page on the BCBS website, according to the report.

4. In an effort to screen ACA applicants and ensure they're eligible for insurance, BCBS of NC will stop accepting online applications. The insurer hopes this will decrease unnecessary costs. "Let's face it, we've got a crisis here," said Wanda Stephens, an agent in Raleigh, according to the report. "They point-blank said: If you have a quoting link for Blue Cross on your website, that you should take it off." BCBS of NC declined to comment.

5. The losses have public health officials worried as well. Calling it a "matter of very high priority concern," North Carolina Insurance Commissioner Wayne Goodwin plans to send a letter to HHS Secretary Sylvia Burwell next week. Mr. Goodwin is also concerned about BCBS of NC's recent system failure, which has prompted more than 600 complaints to the North Carolina Department of Insurance.

More articles on payer issues:
Health insurers in the news: Jan. 21-27
Aetna, Boston Children's Hospital resolve contract dispute
MNsure audit found nearly $200M in insurance errors 

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