North Carolina Blues Product May Save Money, but Holds Major Pitfalls for Members

by Jane Anderson

A new individual and small-group product from Blue Cross and Blue Shield of North Carolina — which reimburses members directly for care at 140% of Medicare rates — could be one answer to the problem of how to hold policy costs down, some analysts say. But others warn that members may be unprepared for negotiating fees, especially for more complex care scenarios, and may be caught off guard by balance bills.

The product, offered for policy year 2019, is a non-Blues branded plan called myChoice with premiums that will be 33% lower, on average, for individual plans, the insurer says.

Under the plan's rules, there are no restrictions on which providers a member can see, but the member — not the plan — is responsible for paying the provider. The insurer then will reimburse the member — not the provider — at up to 140% of Medicare rates, according to the North Carolina Blues plan. Members are responsible for any charges above 140% of Medicare rates, and balance billing does not count toward the plan’s deductible or out-of-pocket maximum.

This is "a new and untested approach," says Mark Hall, professor of law and public health at Wake Forest University in Winston-Salem, N.C. "It is worth trying this approach, especially in areas where providers are reluctant to negotiate with health plans for substantial discounts. But it remains to be seen how well — or not — it will work," he adds.

William DeMarco, founder and president of Pendulum HealthCare Development Corporation in Rockford, Ill., tells AIS Health, "for the consumer I see a lot of turmoil as fees go up even for the same doctor over time, so a lot of surprise bills will need to be dealt with. The insurer can blame the patient, and the doctor tells the patient if you do not like what he’s charging, go elsewhere."

Joseph Paduda, principal at Health Strategy Associates, LLC., says that the patient education component of the plan will be critical for its success. "People are used to a standard type of health plan, and this puts a lot more responsibility on the patient to negotiate price and care. Some patients will be uncomfortable with this, and others will likely be surprised when they get a balance bill for much more than they expected."

From Health Plan Weekly