Blue Cross Blue Shield Issuing Refunds

The new health law that went into effect on March 23 is causing Blue Cross Blue Shield of North Carolina to dole out $156 million in refunds to its customers.  USA Today’s article by Alison Young, “Blue Cross to refund $156 million in N.C.,” speculates that other insurers in other states may be doing the same.  North Carolina’s health insurance regulators have been looking into its insurers’ practices deeply since the government’s new health care law in March and found that their insurers need to make some changes.

Blue Cross Blue Shield of North Carolina recently requested approval to increase the rates they charge their customers.  It was determined that the company was building up reserves in order to finance claims that it will need to pay in 2014 and beyond, when many more changes to the health care law will go into effect.  If you compare health insurance today to what it will look like in 2014, there will be many differences.

As a result of this inquiry, 215,000 individual policyholders in North Carolina will be getting refunds by the end of this year.  The reserves system was not put into place for group plans so they are not effected by this refund.  Average policyholders can expect to receive around $690 each.  Reserves were collected in the beginning of a policy being issued to help keep the premium costs even throughout the life of the plan, but the new health care law doesn’t allow insurance to work that way.  The U.S. Department of Health and Human Services is looking into whether this is a larger issue that needs to be addressed nationally.

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