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Blue Shield’s 2017 Individual and Family Plan Rate Change

As the individual market matures, Blue Shield of California continues to learn more about the population we serve and how our members are using coverage.

Our 2017 statewide average increase of 19.9% is being driven by our members using more healthcare services than we expected – including higher cost trends by members who joined during Special Enrollment Periods – the underpricing of our 2016 rates and the phase-out of the federal reinsurance program. As you know, averages can be misinterpreted. Rate details by pricing regions can be found in the “Covered California’s Health Insurance Companies and Plan Rates for 2017.”

Here are additional details on what contributed to our rate increase:

  • Underpricing of 2016 Rates: 2016 pricing was completed in the first quarter of 2015 and relied heavily on the favorable 2014 healthcare expense experience to set rates. Our 2015 healthcare expense has since shown that our members’ utilization is significantly higher than in 2014.
  • Higher than Anticipated Member Utilization of Healthcare Benefits: According to our data, the higher trend was driven by prescription drugs and by members who joined during the special enrollment period. The SEP population had up to 30% higher utilization than members who joined during the standard open enrollment period.
  • Removal of ACA Reinsurance: The ACA reinsurance program will be phased out in 2016. The reinsurance program had provided funds to plans with higher-cost enrollees to offset those medical costs and guarantee coverage regardless of health status. The end of this program alone added 4.6% to our 2017 rates.

In a news conference held this morning, July 19, 2016, Covered California announced that their 2017 Individual and Family Plan rates have increased by a weighted average of 13.2% statewide. The 3-year average increase of 7% is lower than pre-Affordable Care Act trends.

Covered California has created a competitive marketplace and provides individuals and families with access to the care they need when and where they need it. We are committed to our partnership with Covered California and fostering a statewide health exchange market that is stable over the long term.  Excerpt of Agent Bulletion–

Learn more
For more information on today’s announcement, please see Covered California’s press release.
Comparison shop – All companies, all plans – including subsidy calculation for Covered CA

Proposed Effective Date: 01/01/2016
Type Attachment
Initial Filing Download
Subsequent Submission 11-06-2015 Download
Subsequent Submission 11-24-2015 Download

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