Obamacare bankrupting North Carolina's BCBS Insurance Company

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First some background, Blue Cross Blue Shield of North Carolina is our states largest health insurance company and covers the majority of the people in our state. The company has never had a loss in recent decades until the start of Obamacare.

BCBS of NC has stated previously that they would not likely offer ACA policies in 2017. BCBS is the only company to offer ACA policies across the entire state. The other small health insurance companies only offer ACA policies in 13 (mainly urban) counties of the 100 counties in our state.

Similar to what is occurring in other states, as Obamacare is driving the largest insurer into bankruptcy (or to stop offering ACA policies) there will no longer be ACA insurance available for the majority of the population of the state in 2017.

The situation is so dire that the BCBS is stopping the advertising ACA policies and stopping accepting online applications, and is eliminating sales commissions for agents selling ACA plans. BCBS of NC simply wants to stop pushing Obamacare policies which are driving them into bankruptcy, and make it very difficult for anyone to sign-up for ACA policies in 2016.


Blue Cross projects $400M loss in NC on ACA
http://www.newsobserver.com/news/business/article57367343.html
  • Insurer is eliminating sales commissions for agents selling ACA plans
  • Will also stop advertising ACA policies and stop accepting online applications
  • Deterioration in insurer’s ACA business is causing alarm among agents, public health officials
Blue Cross and Blue Shield is projecting a loss of more than $400 million on its Affordable Care Act business in North Carolina, prompting the insurer to eliminate sales commissions for agents and impose other emergency measures to stem financial losses it attributes to the federal health care law.

Blue Cross, the state’s largest health insurer, provided the grim financial update to insurance agents this week as a rationale for ending payments to the agents and for terminating its advertising of ACA policies. The Chapel Hill insurer also plans to stop accepting applications online through a web link that provides insurance price quotes. The move is an attempt to screen ACA applicants and verify they are eligible for health insurance.

The insurer outlined the changes during a webinar it hosted Thursday. Hundreds of agents from around the state logged on to hear a presentation from Roy Watson Jr., Blue Cross’ sales director for individual and small group markets.

According to agents who listened to the webinar, Watson said the company’s combined loss for 2014 and 2015 on ACA customers is expected to top $400 million when the company announces its year-end financial results in the coming weeks.

“Let’s face it, we’ve got a crisis here,” said Raleigh insurance agent Wanda Stephens. “They point-blank said: If you have a quoting link for Blue Cross on your website, that you should take it off.”

Blue Cross declined to comment further but did not challenge the agents’ descriptions.

The dramatic deterioration in Blue Cross’ ACA business is causing increasing alarm among agents and public health officials.

N.C. Insurance Commissioner Wayne Goodwin (Democrat) said he intends to send a letter next week to Sylvia Burwell, U.S. secretary of health and human services, outlining his concerns on “this matter of very high priority concern,” as well as other pressing developments.

(Much more at above url)
 
How does that work? Can they legally refuse to offer insurance under obamacare? Who are they covering? And if they can do it, why wouldn't the other companies do the same thing?

Their experience is not unique. Most carriers experienced big jumps in claims as they covered new people under ACA. The reason is obvious. They were typically people who had not been getting regular health care and often also had large families. No doubt there is a lot of fraud involved too, as happens regularly with medicare and medicaid.
 
AAAintheBeltway said:
How does that work? Can they legally refuse to offer insurance under obamacare? Who are they covering? And if they can do it, why wouldn't the other companies do the same thing?

Their experience is not unique. Most carriers experienced big jumps in claims as they covered new people under ACA. The reason is obvious. They were typically people who had not been getting regular health care and often also had large families. No doubt there is a lot of fraud involved too, as happens regularly with medicare and medicaid.
More...

All insurance companies can either choose to offer ACA policies or not. In fact the majority of health insurance companies in the U.S. do not offer ACA policies but simply sell to businesses. Note that the majority of health insurance in the U.S. is still provided via your employer not via ACA.

Originally many health insurance companies thought Obamacare would be a big boon to their bottom line and that the government would bail them out if they suffered losses. This has proven not to be true.

Now there are at least 20 states in which the dominant insurer is likely to stop offering ACA policies in 2017 - which will leave many ACA policy holders uninsured after 2016 with not alternatives.
 
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NC insurance commissioner blames ACA for industry woes
Commissioner Wayne Goodwin fears N.C. insurers will stop selling individual policies; Goodwin, a Democrat, warns the situation is urgent and getting worse.

http://www.newsobserver.com/news/business/article58154628.html

N.C. Insurance Commissioner Wayne Goodwin this week became the latest public official to warn of the harms wreaked by the Affordable Care Act, saying the federal insurance law has destabilized the state’s insurance market and now threatens to leave some residents without options for health insurance.

Goodwin expressed his concerns in a letter sent Tuesday to Sylvia Burwell, secretary of the U.S. Department of Health and Human Services, as a follow-up to a personal conversation he had with the Obama administration official in November. Goodwin, a Democrat up for re-election this year, warned that the ACA is driving up insurance costs, reducing consumer options and generating unsustainable financial losses for the insurers, with the potential risk that insurers will withdraw from the state altogether.

(More at above url)
 
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