BCBSNC Requests Smaller 2011 Rate Increases for Individual Customers

70 percent of Blue Advantage/Blue Options HSA members would see rate changes less than 10 percent; including almost 28,000 customers who would see rate decreases

Chapel Hill, NC

– Today Blue Cross and Blue Shield of North Carolina (BCBSNC) filed a rate request with the North Carolina Department of Insurance for a base rate increase of 6.97 percent for Blue Advantage and 2.06 percent for Blue Options HSA. These requested base rate increases are the lowest since 2007. Blue Advantage and Blue Options HSA currently serve more than 300,000 customers under the age of 65.Seventy percent of Blue Advantage/Blue Options HSA members would see rate changes less than 10 percent, including almost 28,000 customers who would see rate decreases.

“Most of our Blue Advantage and Blue Options HSA customers will see smaller rate increases for 2011,” said BCBSNC President and CEO Brad Wilson. “However, the only way to make premiums affordable over the long term is to get soaring medical costs under control.”

Rates requested for individual coverage for 2011 reflect medical trend as well as changes made to comply with the new health care reform law.

Factors in calculating annual premiums

“The primary factor impacting rates is the expected cost and use of medical services,” said CFO Gerald Petkau. “Last year 87 cents of each premium dollar we received went to pay medical costs for our customers. Other factors in our overall rate calculation include administrative costs, taxes and a contribution to the reserves we are required by law to maintain.”

After BCBSNC completes its rate calculation, the company submits its rate request to the North Carolina Department of Insurance (DOI) for independent review. Any premium changes to Blue Advantage and Blue Options HSA products must be approved by the DOI.

Following DOI approval, Blue Advantage and Blue Options HSA customers will receive a letter from BCBSNC in October telling them what their specific rate increases will be for 2011. Customers may choose to make changes to their deductible, co-pay or co-insurance to reduce their premium. Customers may also choose to enroll in a new lower-premium product with streamlined benefits that BCBSNC will introduce in November.

Impact of Health Care Reform on Rates

Some provisions in the new law have an impact on 2011 Blue Advantage and Blue Options HSA rates. These changes provide more benefits, but come at a greater cost. These changes include unlimited lifetime maximums, enhanced preventive care coverage, and no dollar limits for certain types of care such as mental health and prescription drugs.

An additional factor affecting rate increases for some members starting in 2011 is a provision in the health care reform law that requires insurers to rate dependents under age 26 as a single age group. Today, BCBSNC uses six distinct age groups to set premiums for these customers. This change means some customers under age 26 will see a smaller increase – or even a decrease – in their premium for 2011, while others will see a larger increase.

BCBSNC currently prices its individual products taking into account the effects of underwriting, which reflects an individual’s health condition. The rating structure for policies sold or modified to lower benefits after March 23, 2010 will change in 2014, when health care reform eliminates underwriting. This effectively shortens the expected length of those policies, and as a result, the requested premium increases are lower.

Given what is known today about the health care reform law, premiums will be generally higher for individual policies after 2014. Rates generally will be lower for less healthy consumers and higher for healthier consumers than they would have been without reform. Federal subsidies will be available for eligible consumers.

About BCBSNC:

Blue Cross and Blue Shield of North Carolina is a leader in delivering innovative health care products, services and information to more than 3.7 million members, including approximately 900,000 served on behalf of other Blue Plans. For 77 years, the company has served its customers by offering health insurance at a competitive price and has served the people of North Carolina through support of community organizations, programs and events that promote good health. Blue Cross and Blue Shield of North Carolina is an independent licensee of the Blue Cross and Blue Shield Association. Access BCBSNC online at www.bcbsnc.com.

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Underwriting in a general sense is concerned with the insurer’s risk selection. Insurers make use of life underwriters to review life insurance coverage applications. However, insurance coverage agents or gross sales representatives often do the preliminary underwriting- hence, they are referred to a ‘field underwriters’. The insurer trains ‘field underwriters’ to ensure that solely appropriate dangers are referred to the insurer’s underwriting division for consideration.

Life insurance coverage underwriting is predicated on the hazards presented by an applicant. Bodily hazards, moral hazards and occupational hazards are just some of the danger areas examined. Bodily hazard refers to situations of the body that enhance likelihood of the insured’s death. Ethical hazard refers to the chance that the applicant may be looking for to realize unlawfully, speculate on the lifetime of one other or in any other case act dishonestly in making use of for the policy. Primarily based on the hazards present, underwriting could be subdivided into groups.

Medical underwriting

This type of underwriting can take place with or with out medical examinations. Typically the underwriter requires a mix of warranties and representations from the applicant and medical tests. This relies of the applicant’s age and coverage sought typically. Info similar to family history and personal medical history shall be sought in this phase.

Occupation/Lifestyle underwriting

The underwriter additionally requires fundamental details about actions undertaken for employment or enjoyment. Dangerous jobs include the armed services, pilots and construction. Actions which can be thought-about hazards embody racing and skydiving for instance. Way of life concerns may additionally include sexual orientation and drug use. Non-disclosure of such activities could constitute misrepresentation that can lead to an insurance contract being modified or cancelled.

Financial underwriting

Monetary underwriting involves the coverage owner and insured (if the two are different persons). It is used to detect ethical hazard and in addition to ensure that individuals do not speculate on their own lives by taking out much more insurance than they’re worth. A person, who takes out a big coverage on the life on his or her spouse, while having a small amount of life insurance coverage themselves, will raise eyebrows. Monetary underwriting broadly states that nobody ought to search particular person life cowl greater than 30 instances their earnings without justifying it.

Major underwriting components

Life insurance coverage underwriters must use the knowledge to assess the risk of loss (dying) of a selected applicant. This is not accomplished by a whim, however by inserting the applicant in a threat group that’s defined by a specified rating system. Information about age, top, weight, occupation, hobbies, medical condition, funds and medical historical past (private and household) is used to classify an applicant based on risk. The questions on a life insurance coverage software and non-medical type are designed to uncover warranties and representations crucial for the underwriting process.

Underwriting action

As soon as a life insurance coverage application is reviewed, it’s then assessed by way of the danger posed by the applicant. The proposed insured is assessed into one in every of four threat groups:

a) Standard risk- That is the ‘regular’ rating.

b) Substandard danger- Might be accepted but at a higher premium rate.

c) Declined threat- This can be a risk that it too excessive for the insurer to just accept

d) Most well-liked risk- One that’s granted a premium decrease than the usual rate.

The result of life insurance underwriting is that an application is declined, deferred or accepted. With a deferral, the underwriter temporarily refuses to accept the coverage until a selected condition is addressed. The applicant is free to reapply as soon as the condition of concern is addressed. Once a policy is accepted, it can be accepted at a higher rate, normal price or preferred rate. Read more other FREE information about buy life insurance, whole of life insurance and 20 year term life insurance

Many people think COBRA is the only health insurance for unemployed citizens. However, other choices do exist, and quite often they provide a more cost-effective alternative.

For instance, temporary health insurance lets you keep receiving the same high standard of medical care you recieved while you were employed, and at an affordable price. After all, if you are in-between jobs then you certainly do not have additional funds to pay for the expensive fees associated with health care.

The common mentions of COBRA coverage by your employer may make it seem easier to obtain, but there are actually many drawbacks to using it.Chief among those is cost, because COBRA coverage includes high premiums and administrative fees. So it makes sense to find COBRA insurance alternatives.

So while your actual doctor’s visit fees may be minimized by COBRA, the administrative fees you pay will cancel out your savings. But alternatives to COBRA like short term insurance do not come with those excessive fees.

Short term medical insurance plans can be bought online, making it a very easy purchase. You can quickly compare details from many different types of plans to find the right one for you, and then order your plan and print your id card from your home computer.

Afraid that by signing up for short term health insurance, you will be locked into an agreement that is longer than what you need? Do not worry, because you only need to buy this coverage for the specific amount of time you need it.So you will not be paying for coverage you do not use.

Whether you have recently been terminated, laid off, or have quit your job for another one which requires a probationary period before you’re accepted into their plan, you have a need for temporary insurance. It provides many advantages over COBRA coverage, and it can be bought easily online, and only for the amount of time you need it for.

Return of premium life insurance coverage is much like time period insurance in lots of ways. In both varieties of policies, the policies are good for a specific term. Each varieties of insurance policies require you to pay a fixed premium on the policy, though the premiums on return of life policies are typically higher. Should you die at any time throughout the time period, your beneficiaries can accumulate on your demise profit, and the demise benefit is tax-free. However, when you survive the term, that’s the place the similarities end. With a term life policy, you are left with nothing. But with a return of premium policy, each cent you paid into the premium is returned to you.

While it is understandable that this option may be very tempting for individuals who were considering term life insurance coverage, return of premium life insurance just isn’t perfect, either. One of the greater flaws with this sort of account is that, if you must cancel the account for any motive, you then forfeit any claim you had to your premiums. And for the reason that premiums are higher than term life premiums, some argue that you simply might as effectively just get a whole life account.

Nevertheless, it’s at all times good to have options. There’s a good probability that you’ll outlive your insurance term. If that’s the case, then most people would like to get their premiums back. Others desire time period life because it’s merely cheaper and, if one thing occurs to you, you finally get the identical protection, but you did not spend as a lot on it in the first place. But as with all insurance coverage selections, it’s best to contemplate your individual circumstances and focus on your options with your partner earlier than making a ultimate decision. Checkout more other helpful info about universal life insurance definition, elderly life insurance and whole life vs term life

Significance of an annuity

Without an annuity, it is quite possible that you just may need to dig up money in case you wish to cover some unexpected expense within the future. This could be something as simple as a household trip if you lastly get the time for it or could even be a vital surgery that your insurance won’t have the ability to pay for in full. You should keep in mind that these sorts of bills virtually always occur regardless of how careful you would possibly be. The number of risks that you have to face whenever you age enhance considerably, which is why it’s essential to be ready for them.

Learning about annuities

Now that you already know why you need annuities, the following problem would in all probability be setting one up. This may not be as exhausting as you might need imagined it to be. You’ll be able to search for on the web about how one can set one up. If you’re not comfy utilizing the internet for monetary transactions, you can also call up a representative from an appropriate monetary institution and have them work out the annuities amount for you.

How a lot do you need for one?

This is a good question, but the answer to it varies from particular person to individual. Take into consideration how a lot money you may need to steer a cushty life. Accordingly, you need to set aside a fund that is able to paying you back this amount on an everyday basis. It might sound a bit advanced right now, however in case you put your mind to it, you may be assured of getting a very good estimate proper away. The one factor that you simply might need to bear in mind is that annuities are versatile and the quantity you wish to set aside is totally dependent on you.

With all of this info at hand, you have to be enthusiastic about organising your annuities proper away. This isn’t an issue and you need to be able to take action when you simply comply with directions and know more about find out how to set up the annuity. At all times get all your doubts clarified and if you are not sure about how you prefer to issues sooner or later, discuss the same with a financial advisor. Keep in mind that this is your money that you’re putting away and hence, if there’s something you aren’t comfortable with, it is best to handle it right away earlier than it becomes an issue later on. Read more other helpful info about whole life insurance online quote, universal life insurance quotes and universal life insurance rates

What insurance policies are on the market?

There are quite a few totally different policies available, have a look at each one to discover if it suits your needs. In fact chances are you’ll want to provide security in the type of savings, or merely to make sure that any expenses accrued upon your death are taken care of. Listed here are 4 totally different life insurance coverage options.

Common insurance coverage is where you pay a premium and an additional amount that you simply wish to invest. Normally, mortgages and bonds are used as a result of they are relatively safe, and both the premium and funding monies are put into an account. You possibly can then either watch it develop, or use it to pay later premiums.

Variable insurance coverage is like the above, except that stocks are included in the investment options. The beneficiary will get the policy sum, or, that quantity plus whatever the investment portfolio has generated.

Term life insurance is essentially the most uncomplicated method. There isn’t a investment involved, you simply purchase cover for a set variety of years, and your beneficiary will get a lump sum do you have to die during the coverage period.

Entire life insurance coverage is superior to term life because you are coated to your whole life, versus just a set time period. The premium paid stays the identical throughout, and the insurance coverage company builds your policies value by investing a few of what you pay in.

Four ways to get great rates

* Any mandatory medical assessments needs to be carried out first thing within the morning, as a result of ldl cholesterol and blood stress are confirmed to be lower at this time.
* By no means lie in your insurance application, these companies are consultants at recognizing fibbers, and can terminate your coverage inside the first {two} years in the event that they uncover you have got been hiding something.
* Health modifications over a period of time, if you’re certain that yours has improved, apply for a reappraisal of your premiums.
* There are a whole lot of insurance corporations on the market providing completely different advantages and prices. You should definitely check out as many as you presumably can before committing to a decision. Find more other FREE articles about affordable life insurance quote, advantages of whole life insurance and life insurance types

Medicare Part D: What’s it?

Medicare’s prescription drug program was created because of the Medicare Prescription Drug, Enchancment and Modernization Act of 2003 (MMA). Although the Act was written into legislation in 2003, Medicare eligible people did not start enrollment into these plans till January 1, 2006. This plan is commonly referred as PDP (Prescription Drug Plan) or simply Part D.

Part D is accessible to everybody who has Medicare no matter earnings or well being history. Non-public insurance companies present the coverage. The enrollees select a plan from those obtainable of their geographic region and pay the insurer a month-to-month premium for the coverage. Regardless that enrollment is voluntary there is a penalty for late enrollment which will likely be discussed a bit later on this article.

You can elect to enroll in a Medicare Prescription Drug plan in certainly one of {two} ways:
(1) Stand alongside prescription drug plans (PDP); or
(2) Medicare Benefit Prescription plans (MA-PD).

The first kind of plan covers prescription drug benefits only. These plans had been designed for people who choose to stay with traditional price for service Medicare and want the prescription drug protection along with a Medicare complement to round out their medical coverage. Most States have several carriers who provide this coverage on a free standing basis. The plans do vary in areas of monthly premiums, deductibles, copays, formularies, and different price sharing arrangements.

Medicare Advantage plans, the second broad category of prescription drug plans, not solely cover medications but additionally Medicare approved medical services. These plans can be found by non-public insurers and embody HMO, PPO, and Private-Payment-for-Service programs. Within the case of Medicare Advantage Plans, the Medicare beneficiary has truly “traded” their traditional Medicare benefits for a Medicare Advantage program. Medicare Benefit plans typically present enrollees wish additional benefits. Nevertheless, there are frequently restrictions on the medical doctors and hospitals that they may use for covered medical services.

Enrolling in a Plan

Typically talking, a person may enroll in a Prescription Drug Plan during their preliminary open enrollment period once they first qualify for Medicare Half B. For somebody turning age sixty five, this is able to be the three months previous to their birthday month, the month of their birthday, and the three months following their birthday month. After, their initial enrollment period (IEP), there’s an annual open enrollment period (AEP) after they can change plans. Traditionally, the annual open enrollment interval commences on November 15th and closes on December thirty first with enrollments effective the next January 1st. There are other particular enrollment periods obtainable to medicare beneficiaries corresponding to once they relocate or leave employer sponsored plans.

For the 2011 plan year, the annual open enrollment period will begin a bit earlier and finish previous to the holidays to keep away from confusion over deadlines in previous years.

The “Normal” Prescription Drug Plan

All the insurers that participate within the PDP program should offer not less than the Normal plan of coverage. Month-to-month premiums will differ from State to State. However, the common premium for 2010 is predicted to be $46.58. The plan deductible for 2010 is $310.

After you pay the yearly deductible, you pay the next quantities for the remainder of 2010,

- 25% of the price of medication after the $310 annual deductible until whole expenses reach $2830
(the plan pays the other 75% of fees); then

- a hundred% of the following $3610 in whole drug prices (typically called the donut gap or protection
hole); then

- 5% of your drug costs or a copay of $2.50 for generic medicines or $6.30 whichever is lesser; for the remainder of the calendar yr after you’ve got spent a complete of $4550 out of pocket.

Although, at a minimum, an insurer should present a Normal plan, they’re permitted to supply plans that do differ in benefits. These different plans normally cast off the deductibles and impose mounted dollar copays for covered medicines as an alternative share copays. Some of these other plans even cover generic mediations in the “donut hole.”

The Late Enrollment Penalty

When you would not have “creditable protection” from another supply, comparable to an employer plan or the Veterans Administration, and do not sign up for a Medicare prescription drug plan when first eligible, you will, in all likelihood, be charged a penalty for late enrollment. The penalty relies on the number of months which have elapsed since you were first eligible to enroll and when you lastly do enroll. A penalty of 1% per month will probably be levied and that penalty will last for as long as your remain enrolled in a plan. The penalty is predicated on the typical value of a plan in the 12 months that you finally enroll. For example, if 50 months have elapsed because you had been eligible to enroll and the nationwide average price for a plan in that year was $50, the cost to your plan would be $seventy five- (1.50 instances $50). Again, this penalty could be assessed annually into the longer term for as long as you remain enrolled in a plan.

Financial Help for These of Modest Means

The Social Safety Administration has a program accessible for these with qualifying incomes referred to as Further Help. Extra Help can save qualifying people as much as $3900 per year. Extra Assist can help with premiums, paying deductibles and copays associated with a Medicare prescription drug plan. To qualify for Extra Help, a person should be enrolled in a Part D prescription drug plan and for 2010; resouces must be restricted to $12,510 for a person or $25,010 for a married couple. Assets would come with issues like financial institution accounts, stocks, bonds, and mutual funds. Houses, vehicles, life insurance coverage cash values, and money acquired from relatives or others to pay household bills don’t depend as resources. Some individuals with larger annual earnings could qualify for the Further Help program. To inquire when you qualify, you can contact the Social Security Administration at 800-772-1213 or go to your native Social Security office. Find more other FREE information about unicare insurance, medigap insurance and humana insurance

What do these plans cover?

Advantage Plans should provide your Half A (hospital insurance coverage) and Part B (medical insurance coverage) benefits, including emergency and pressing care. The one major benefit area not covered by Benefit Plans could be hospice. Hospice continues to be coated by Original Medicare and should be obtained through a Medicare certified hospice facility.

Many Benefit Plans do provide additional advantages which would include things like dental, vision, listening to, health club memberships as well as other health and wellness programs. Most benefit plans do embrace prescription drug protection (typically referred as Medicare Half D).

Benefit Plans generally fall under the generic class of managed care plans. Normally they are HMO (well being maintenance organizations) or PPO (preferred supplier organizations). There’s additionally a third type of plan referred to as a Preferred Fee for Service program (PFFS).

HMO’s do require that the member select a major care physician from those participating within the plan. That major care doctor is then charged with supervising your medical care which would include referrals to a specialist and admission to the hospital. With an HMO, an individual can only use medical doctors, hospitals, and different amenities that are contracted with the HMO.

The PPO provides participants extra choice. They’ll elect to make use of suppliers of medical care which can be contracted with the health plan or any doctor or hospital. Normally, PPO’s have deductibles, coinsurance and copays to pay for lined Medicare eligible services.

Private Fee for Service plans may allow the plan member to make use of any doctor or Medicare approved hospital. You are not required to choose a main care doctor or watch for referrals to specialists. Nonetheless, not like Unique Medicare, you might find that some medical doctors or hospitals might decline to deal with you based mostly on the reimbursement the PFFS plan is prepared to provide for lined services.

What does an Advantage Plan Price?

Every month the Medicare Advantage program receives a hard and fast amount from CMS (Centers for Medicare& Medicaid Companies) to supply your care. The Benefit plan is then accountable for paying your docs, hospital, lab amenities, and different suppliers of care. Though the plan does obtain a payment to provide you with care, they’re permitted to charge you a monthly premium and extra out of pocket expenses. The out of pocket bills can take the type of copays for physician’s office visits, coinsurance for days in the hospital, or an annual deductible for prescription drugs.

As talked about previously, the member continues to be liable for paying their month-to-month Half B premiums.

How and when can I join an Benefit plan?

A person can enroll in an Benefit plan if they have each Half A and Part B of Medicare and stay in an the place a plan is available. Many plans only cowl sure geographic areas in a state and it’s essential to dwell in that space to enroll.

You can be a part of a plan if you first change into eligible for Medicare. The initial enrollment interval for a newly eligible individual is the three months prior to the month you flip age 65 and the three months following your birthday month. Thereafter, there’s an annual open enrollment interval where an individual could change plans. Historically, the annual open enrollment interval commences on November fifteenth of every year with enrollment closing on December 31st. Coverage in the new plan would be effective January 1st. 2010 is bringing some modifications to the annual open enrollment period. It is going to commence a bit earlier and close prior to the Christmas holidays.

Special open enrollment durations are available to individuals who move out of the plans service space or should the plan cease to supply benefits in your geographic region.

Medicare Advantage Plans and Health Reform

Advantage Plans have value the federal authorities greater than conventional Medicare. As a part of the HealthCare Reform bundle signed into law on March 23, 2010, the federal will start to reduce the subsidies for these plans starting in 2012.

It will in all probability lead to larger premiums being charged or a reduction in the advantages offered. However, these plans will not be able to cut back the benefits that an individual would usually obtained by way of Medicare.

For more details on Medicare Advantage plans, go to Medicare’s web site or seek the advice of with your native insurance coverage agent. Find more other useful articles about small business health insurance quotes, best individual health insurance and self employed medical insurance

A number of the foremost well-known and reliable long care insurance suppliers are Aflac, Great American, New York Life, Prudential, Physicians Mutual, John Hancock, Allianz and Mutual of Omaha. They lead the nation is providing the most effective long care coverage at the most affordable rates. Comparing rates company-to-company is recommended before truly buying this sort of insurance. Looking at each company fastidiously and getting direct quotes from them is the first step in the selection process. Quotes can be received inside minutes by visiting their on-line websites. Personal info is compared against the corporate’s necessities and the individual is then provided with the foremost competitive rates that the corporate can offer.

Once an individual reaches age 65, the probability of needing long run care is astronomical. This is often alarming and something that needs to be checked out carefully. Insurance suppliers are willing to discuss odds and to allow examples of the many completely different care packages that they offer. They supply this information at no cost and professionally analyze every explicit state of affairs to assure that every one personal and financial circumstances are taken into consideration. Future care insurance suppliers are more than willing to allow the most effective value for the foremost coverage in the event that care should ever be needed. They understand that it is something that most Americans need and can purchase a long term policy if it’s financially prudent for them to do so. Read more other useful information about auto insurance lead, direct general auto insurance and auto insurance company ratings

The North Carolina Health Insurance Risk Pool (NCHIRP), a state-created quasi-public nonprofit entity, sells coverage under the name of Inclusive Health. Inclusive Health opened for enrollment in 2009. As of June 2010, about 3,500 individuals are active in the state-run plan. Of those enrolled, about 20% would have met the federal risk pool eligibility requirement of being uninsured for at least 6 months.

Governor Perdue has notified HHS that North Carolina desires to operate the federal temporary high risk pool and designated NCHIRP as the contractor. NCHIRP expects that, based on current experience of the state risk pool and an anticipated $145 million federal allocation, up to 8,000 more North Carolina residents will be able to be covered. High risk pools do not charge an ―actuarially justified premium—most states cap the premiums in high risk pools at 125-200% of the average cost for privately insured individuals in that state‘s individual market. Most state pools fund the difference by assessing health insurers and HMOs but several states, including North Carolina, use a state-funded allocation.

Health Care Reform and High Risk Pools
Under the Patient Protection and Affordable Care Act (PPACA), the Secretary of the US Department of Health and Human Services (HHS) must establish a federal temporary high risk pool program by June 23, 2010. The program will terminate on January 1, 2014 due to the enactment of full federal reforms, including health insurance exchanges. HHS is authorized to carry out the program directly or through ―eligible entities like state governments or a private ―nonprofit.

In a letter to all U.S. governors and insurance commissioners, Secretary Kathleen Sebelius indicated that states could (1) operate new high risk pools alongside an existing high risk pool, (2) establish a new high risk pool for states that do not already have one, (3) build on other existing programs intended to cover high risk individuals, (4) contract with an insurance carrier to provide subsidized coverage for the eligible population, or (5) do nothing, in which case HHS would carry out a coverage program in the State.

By June 1, states must have decided whether to play a role and, if so, in which way they plan to establish a federal high risk pools; by July 1, the plan must be put in motion.

To receive insurance through the temporary federal high risk pool program, individuals must (1) be a citizen or national of the United States or lawfully present in the United States(2) have a pre-existing condition and (3) not have been covered under creditable coverage for a six month period prior to the date on which the individual is applying. Federal high risk pool plans must (1) cover 65% of expected costs (actuarial value), (2) not exceed $5,950 per year for the individual in out-of-pocket costs, (3) no preexisting condition exclusion, (4) cap premiums at 100% of the average cost for individuals at the same age, and (5) not have an age rating greater than a 4:1 ratio.

The HHS Secretary has the discretion to set other specific coverage requirements. The federal government has allocated $5 billion to help fund the interim high risk pools, to be distributed to states using a formula similar to that used to distribute State Children‘s Health Insurance Program funds.

What other states are doing
As of June 1, 30 states plus the District of Columbia have indicated an interest in accepting federal funds to administer the interim high risk pools with federal requirements and 19 have declined a role (Utah requested more time). Several states have cited the lack of program rules or reliable funding as their reasons for allowing HHS to run the pools. (The Solicitation for State Proposals to Operate Qualified High Risk Pools issued by HHS states that contractors are not responsible for costs incurred by the federal program.)
Changes in North Carolina
Beginning July 2010, two high risk pool options for qualified North Carolinians are expected to be in operation. It is anticipated that the federal pool will provide a lower cost option than the current state high risk pool program for those who qualify and enroll. The opportunity to qualify for the lower premiums under the federal pool may cause some who were previously insured under a private plan to forego enrolling in Inclusive Health if they have not already been uninsured for 6 months—an issue that arises from the federal requirements. NCHIRP, as the probable administrator of both options, will be a one-stop resource for high risk individuals seeking insurance coverage. NCHIRP believes it is well-positioned to take on this new program, having gone through the process of setting up Inclusive Health just 3 years ago.
Differences at a Glance Between Federal Pool and NCHIRP

What to expect
Though 30 states have indicated that they are interested in participating in the temporary high risk pool program, the $5 billion allocated to the states is expected to be grossly inadequate to fund the program. Many are predicting the money could run out within a single year – far sooner than the 3.5 years the federal government expects the interim pools to be in place.

The federal cost and coverage requirements create greater stresses on funding adequacy. Despite premium caps, the plans may still be too expensive for many of the high risk population, prompting HHS Secretary Kathleen Sebelius to admit that the plans ―may not be an effective strategy for many people.  (State high risk pools‘ experience has been that their plans—sold at prices above standard market rates—have proven to be unaffordable to many who qualify to purchase their coverage.) There are also potential issues as to whom will be admitted into the pools; 6.6 million to 11.4 million are expected to be eligible – far more than the $5 billion could be expected to cover. State are anxiously awaiting more guidance from the federal government on these issues. The federal government is in the process of selecting a contractor to administer the federal program in the 19 states that have selected the federal fallback option.
BCBSNC Views
BCBSNC is supportive of the federal role in helping high risk individuals, who tend to have been priced out of the market‘ due to pre-existing conditions. We were an instrumental player when the North Carolina high risk pool was established in 2007. We regularly notify applicants who do not health qualify for BCBSNC products about the alternative coverage offered by Inclusive Health.
For Further Information:
Inclusive Health: NCHIRP.org
HHS Fact Sheet: http://www.hhs.gov/ociio/initiative/hi_risk_pool_facts.html
This information has been prepared by Blue Cross and Blue Shield of North Carolina to assist our customers in understanding Health Care Reform. This publication is for information purposes only. It is not legal or tax advice. Please consult with your attorney or tax advisor for further advice. As regulations and other interpretive guidance are published, this information may change. We will continue to work with our customers going forward to provide updates and further assistance.