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Blue Cross To Refund Customers After Not Spending Enough On Medical Costs

Blue Cross Blue Shield of North Carolina

North Carolina's largest health insurer will send money back to about 700,000 customers to comply with a provision in the Affordable Care Act.  

Blue Cross and Blue Shield of North Carolina reported that for the first time it will rebate some customers an average of less than $75 each. A requirement called the Medical Loss Ratio rquires that insurers spend  at least 80 percent of monthly premium dollars for medical costs rather than administration, marketing or profits. If that threshold isn’t met the company has to refund the money.  Blue Cross recorded $685 million in profits in 2018 after collecting $9.1 billion in premiums. Across the country all health insurers paid More than $706 million to nearly 6 million consumers in the form of rebates in 2017. 

In its annual report Blue Cross and Blue Shield of North Carolina said claims and expenses reached a historic high despite fewer customers. And average yearly costs per person were higher. Blue Cross says some of the more expensive services were injectable and specialty drugs, and treatments for chronic conditions such as hemophilia and anemia. 

Blue Cross said a key line of business is individual plans bought on the health insurance marketplace which performed better than expected despite continued to changes to the Affordable Care Act. The individual mandate to have insurance, a key part of the law, was removed.