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September – October 2019
A message from Steve Anderson, vice president of Hospital Contracting & Network Administration
Our partnerships with doctors, hospitals helps keep insurance rates down
 Blue Cross Blue Shield of Michigan is filing individual market rates for 2020 that show a decrease from 2019 rates. How are we able to do that? It’s largely due to our ongoing efforts to collaborate with hospitals and doctors to deliver higher quality and more cost-efficient care.
In other positive developments, I’m pleased to report that our small business customers have received a modest rate increase of only 0.4% over the last five years.
Individual market
Let’s take a closer look at the individual market rates:
- Blue Cross PPO plans will experience an average rate decrease of 7.7%.
- Blue Care Network plans — representing 76% of total individual product enrollment in 2019 — will see an average decrease of 1.2%.
Here’s what Terry Burke, our vice president of Individual Business, had to say about it recently: Over the last couple of years, we’ve been pleased to see a slow trend of stabilization in the individual market that’s now made it possible for us to offer members lower rates. Though the health care landscape is ever-changing, Blue Cross has remained an insurer our members can count on, and we look forward to continuing our work in delivering quality, affordable coverage in every county in Michigan.
In the individual market, Blue Cross and BCN will continue to provide a variety of plan options — 29 total plans across gold, silver, bronze and catastrophic levels — with the addition of one new product, Blue Cross Premier PPO Gold 70/30, for 2020 enrollment.
Blue Cross Premier was designed for consumers looking for more predictability in their health plan. As Burke puts it, The plan helps reduce confusion and surprise expenses by offering a monthly cost structure featuring a set coinsurance amount with no deductibles or copays.
It’s one more example of how we’re innovating to bring consumers and groups a greater variety of plans to meet their needs.
Small group plans
As background, Blue Cross calculates new rates for small businesses twice every year. Here’s how rates are looking for this year:
- In the first and second quarter of this year, there was an average rate reduction across the board for PPO and HMO products — 3.1% and 3.8% lower premiums, respectively.
- For the third and fourth quarter of 2019, we’re expecting a moderate increase of 1.3% for HMO and 5.4% for PPO members.
Since 2015, PPO members have seen an overall rate increase of just over 1%, while HMO members have experienced a decrease of just under 1%.
Blue Cross’ rate changes in Michigan are far below those seen nationally since 2015.
If you’d like more information on rates for small businesses, I encourage you to check out the MI Blues Perspectives blog titled The effect of moderated premiums on small employers.
How Blue Cross holds the line on insurance rates
In summary, here’s a look at three key factors that influence our ability to moderate our rates:
- Our value-based reimbursement programs, including valued-based contracting with hospitals
- Our Patient-Centered Medical Home initiative, the largest in the nation
- More than 25 Value Partnerships programs, which have saved $1.4 billion in costs statewide
If you haven’t done so lately, I encourage you to check out valuepartnerships.com to find out more about how we’re working with hospitals and doctors to make health care work better in Michigan.
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