Blue Cross Blue Shield of Mississippi customers may have noticed lowered health insurance premiums in recent weeks.
Mississippi Insurance Department Commissioner Mike Chaney said the mid-year decrease, which could affect up to 130,000 people in the state who have employer-provided health insurance, is thanks in part to a federal government extension of transitional relief to certain health insurance plans.
“These are policies that the Obama administration granted relief to let companies continue in 2013, better known as grandmothered policies,” Chaney said. “They’re not (Affordable Care Act) compliant, so the rates are lower, and if they had to be ACA compliant, we were looking at something like a 65 percent-plus increase.”
Bob Williams, director of life and health insurance under Chaney, said transitional relief applies to plans such as those that might not have essential health benefits or certain taxes applied. Williams said those plans are typically seen in small group plans of up to 225 or 250 people, or individual plans.
“You might have 10 or 20 people there, or 15 people here,” he said. “It’s a lot of those small businesses you find around Mississippi.”
Brandt Galloway, an agent with Galloway-Chandler-McKinney in Columbus, said his firm has seen Blue Cross Blue Shield group rates fall locally. Galloway-Chandler-McKinney serves northeast and north central Mississippi.
“On the group basis, we did see almost all of our groups get a reduction for the balance of our policy year,” he said.
Galloway also noted it’s not common to see insurance rates fall in the middle of the year.
Passing savings along
The Centers for Medicare and Medicaid services announced an extension to the transitional relief policy in April. Shortly after that, Blue Cross Blue Shield of Mississippi approached the Mississippi Insurance Department about lowering rates for certain group insurance classes.
“Blue Cross came to us about 90 days ago and said, ‘You know, we’ve looked through these plans and based on utilizations and trends and what’s going on with it, we are going to be able to get a rate reduction to this block of businesses,'” Williams said.
Lowered utilization, Williams said, means fewer people are using their health insurance, which allows a provider to lower premiums.
Williams said it’s hard to say specifically whether that means people are getting sick less or just avoiding trips to the doctor’s office.
“It could be a combination of things,” Williams said. “It could be fewer people in those particular groups are sick. It could be that maybe people have got other things going on. I relate it back to when Katrina hit the coast, utilization fell. You would think it would’ve gone up. But that was because people had .. other things going on in their lives that were more important than the need to get to the doctor.”
Humana and United Healthcare, two other large health insurance providers that serve Mississippi, have not lowered premium costs.
Unrelated to repeal and replace
The Blue Cross Blue Shield Association recently issued a joint statement, with American Health Insurance Plans, in opposition to the “Consumer Freedom Option,” a provision in the Better Care Reconciliation Act that they claimed would hurt coverage for those with pre-existing conditions and cause health care costs to rise. The BCRA is a U.S. Senate bill that aimed to repeal and replace the Affordable Care Act.
Purvis said Blue Cross Blue Shield of Mississippi’s rate decrease was not related to the national organization’s opposition to the Senate health care bill.
“In recent months, we have seen a lowering of health care utilization and cost trends for certain lines of business that has resulted in a premium reduction for some of our customers,” Purvis said. “This reduction is unrelated to any proposed legislation in Washington and is primarily a result of our efforts to work with our customers and our network providers to manage health risks and healthcare costs.”
Williams and Chaney said the rate decrease is good for Mississippi health insurance customers, though it’s hard to pin any larger takeaway on the state’s insurance market on the drop.
Williams echoed Galloway’s sentiments, and said it’s rare to see a company lower rates during the year.
“Over the years, I have seen some rate reductions in the mid-year,” he said. “Normally when companies file their rates for the year, it’s pretty constant and you don’t see a decrease or increase — and of course the only way you’d see an increase was if there was something catastrophic that happened.”
Alex Holloway was formerly a reporter with The Dispatch.