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Robin Cruson
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News Alert – July 23, 2015
Individual/Consumer Markets

What to Expect for 2106 Open Enrollment Plans

"On Monday, the Texas Department of Insurance gave BlueCross and BlueShield 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."

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The Cruson Insurance Agency is your single source for all of your insurance needs. Whether you're looking for health coverage, Medicare plans, life insurance, final expense plans, temporary health coverage for new employees or in between jobs, vision, dental, hearing and even pet insurance; we can help you find the coverage that best suits your needs. - Contact Robin at