Blue Cross Blue Shield of Michigan plans to give small businesses and other policyholders rate relief this summer as a result of lower medical claims during the COVID-19 pandemic.
As hospitals were unable to perform non-essential surgeries and procedures, and as people deferred medical care since mid-March, the amount the health insurer paid in medical claims has declined. That’s why Blue Cross Blue Shield of Michigan plans to provide fully insured employers in the small group market who have 50 or fewer employees with a 30 percent premium credit in July.
“We’ve been monitoring and thought it was the right step to take and be responsible during this pandemic,” said Ken Dallafior, executive vice president for Blue Cross Blue Shield’s commercial business. “When we look at our claims trends and utilization in the marketplace, we find the deferred care and those things allow us to give some of this relief back.”
The insurer saw a “slight falloff” in medical claims in March as the pandemic spread into Michigan, followed by a “more severe” decline in April, Dallafior said. May also “is starting to play that way,” and medical claims overall for elective surgeries are “way down,” he said.
Blue Cross Blue Shield also said Wednesday it proposed small adjustments in 2021 for small group policies: A statewide average rate increase of 0.9 percent for its PPO plans, and 1.9 percent for HMOs, “and it’s possible some of those groups will have negative rates,” Dallafior said.
Given the pandemic and its economic consequences, Blue Cross Blue Shield “is as confident as we can be in these uncertain times” about the 2021 small group rates, he said.
Rate relief for Blue Cross Blue Shield’s fully insured large group businesses with more than 50 employees will come later in the year or in 2021, he said.
“We’re following very closely the impact of that and then monitor that and will do something appropriate and commensurate with the outcome they are experiencing as a group,” Dallafior said.
The state’s largest health insurer intends to provide $100 million in overall rate relief for medical, dental and vision policies. Employers who use Blue Dental and Blue Vision fully insured group policies will see $10.5 million in relief through a one-month premium refund in July. Blue Cross Blue Shield also intends to hold rates steady for dental and vision policies for 2021.
Individual health policyholders will get a one-time rebate that Blue Cross Blue Shield will provide in September. The insurer will base rebates on each subscriber’s plan and premiums paid in 2019.
“We are living through a great disruption in health care economics, and there is still a lot of uncertainty about where health care spending will go this year,” President and CEO Dan Loepp said in a statement. “But at this point in the pandemic, we’re confident in premiums exceeding claims for the year — so we are starting to give money back to our customers. We hope these refunds allow businesses across Michigan to better cover their employees’ health care and provide our members some relief during a difficult time.”
Blue Cross Blue Shield joins other health insurers in extending temporary rate relief because of lower medical claims trends during the pandemic.
Grand Rapids-based Priority Health said last week it will apply a 15-percent reduction to June and July premium bills for small businesses with two to 50 employees, and for individual policyholders enrolled in the MyPriority health plan, as MiBiz previously reported. Large group and fully funded employers will receive a premium credit in the fourth quarter, once Priority Health determines the amount of excess revenue available in the health plan beyond the normal margin and administrative costs.
Detroit-based Health Alliance Plan on Wednesday said it would reduce monthly premiums 5 percent through the end of 2020, beginning in July, for small group and individual policies.
