With all of the changes in the health insurance industry under the Affordable Care Act and an overall increase in the cost of health insurance for consumers, you may be wondering exactly what your monthly premium pays for and where all of that money goes. Blue Cross Blue Shield of North Carolina is happy to answer that question. As most people already know, your health insurance premium is part of a large pool of money collected by the insurance company, which is then distributed in the form of health care claims to those in need of medical care. A portion of that pool of money pays for health care and a portion goes toward operating the insurance company itself and creating a profit. The question most people have is how much of that money actually goes toward claims and how much is simply profit for the company.
Recently, BCBSNC announced that they spend almost 86 cents of every premium dollar to pay for customers’ health care needs, including visits to the doctor’s office, surgeries, diagnostic tests, prescriptions, contact lenses, etc. In fact, Blue Cross Blue Shield of NC paid $5 billion dollars in claims in 2013 alone, making that $5 billion dollars worth of coverage directly benefiting BCBSNC customers. In addition, there is non-medical spending that still directly affects BCBSNC members in a positive way. Non-medical expenditures include things like customer service and technology improvements, which provide customers with the most up-to-date, user friendly website and an exceptional customer service experience.
Even further, under the Affordable Care Act there now exists what is called the Medical Loss Ratio Requirement. This requirement prevents insurance companies from engaging in excessive spending on administration, salaries and other business costs. Insurance companies are now required to use 80 cents of every premium dollar collected from individual and small group customers to pay customer claims and support quality of care. Even before the law, however, BCBSNC exceeded that standard, and in 2012 they paid $260 million dollars more toward health care expenses than was required under the law. This requirement also means that insurance companies cannot increase rates simply as a way to increase profits, but must maintain a minimum percentage of dollars spent on health care or refund that money to customers.
Let’s face it, the cost of health insurance is on the rise and it can be a strain on any income. Understanding where your insurance premium goes is an important part of understanding your health insurance plan and what makes it valuable. Although it may be tough to pay out a few hundred dollars a month, when the need for medical care arises, Blue Cross Blue Shield of North Carolina is there to make sure you and your family are covered.
For more information on Blue Cross Blue Shield of North Carolina health insurance coverage, the Marketplace and healthcare gov to apply for your subsidy, please visit our website at www.nchealthplans.com or call our toll free number 888-765-5400 and speak with one of our experienced and professional agents. Let us help you navigate through the Health Care Reform changes in accordance with the new regulations of The Affordable Care Act, also known as Obama care.
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With the cost of health insurance on the rise, you may find yourself looking for ways to help cut the cost. One of the provisions of the Affordable Care Act is that the federal government now offers federal tax credits, or subsidies, to low-to middle-income individuals and families in order to help reduce the cost of health insurance. Your federal subsidy is an advance premium tax credit and is applied directly to your monthly insurance premium. Government subsidies can substantially reduce the amount you pay for your Blue Cross Blue Shield NC health plan. (more…)
