Blue Cross and Blue Shield drops individual insurance plans

Blue Cross and Blue Shield of Minnesota announced last week that it will drop health insurance plans for individuals and families starting next year.
The insurer said medical claims far exceeded premium revenue for individual plans, resulting in a loss of more than $500,000 over a three-year period in the individual area.
According to local insurance agents, that decision will have far-reaching implications.
“This will really affect farmers,” said Shirley Top, an agent for the Luverne office of Kozlowski Insurance. “I never dreamt I’d see this.”
Affected policyholders were notified by mail Thursday and Friday, and agents are bracing for phone calls.
Kozlowski Insurance handles more than 800 individual policies for Blue Cross and Blue Shield.
“So there will be a lot of disruption,” said Jon Kozlowski, owner of Kozlowski Insurance, which also has offices in Pipestone.
The most important message at the moment?
“Don’t panic,” he said. “There will still be options for individual insurance.”
For one thing, the decision won’t affect those on small or large employer-based plans, and it won’t affect anyone on Medicare.
For those who are affected, there will still be options to buy individual coverage through Blue Cross and Blue Shield and other major insurers like Medica, Preferred One and Health Partners.
But, of course, that may require choices for different providers or different premium structures.
That, Kozlowski said, is something everyone should be accustomed to by now.
“Ever since the Affordable Care Act went into effect in 2014, we haven’t kept our policies the same from one year to the next,” he said.
But there will be options, even under Blue Cross and Blue Shield’s Blue Plus, which has teamed up with Sanford Health under its accountable care option.
“Those who doctor primarily in Luverne wouldn’t be affected as much under this plan,” Kozlowski said.
Some analysts have said the Blue Cross and Blue Shield decision is a symptom of an unstable individual health insurance market.
“The whole thing that has failed with the Affordable Care Act, in my opinion, is that younger healthier people aren’t going to pay for premiums,” Kozlowski said. “They’d rather pay the $700 fine and not have health insurance.”
The solution would be to encourage these decidedly uninsured to buy health insurance in order to strengthen the pool of those filing expensive claims.
To do that might require higher penalties for those who opt out of insurance and provide more generous subsidies for those who are insured.
Kozlowski said there is plenty of time to consider options.
The Blue Cross Blue Shield changes go into effect Jan. 1, so Kozlowski advises affected policyholders to start looking at options as soon as open enrollment for 2017 begins in order to understand choices this fall.
Open enrollment for Jan. 1 policies is Nov. 1 through Dec. 15. Policies enacted after Dec. 15 won’t be effective until Feb. 1.
Although the main Blue Cross Blue Shield unit is leaving Minnesota's individual market, its much smaller subsidiary, Blue Plus, will continue to offer plans on the individual market, according to the company statement.
Blue Cross and Blue Shield customers losing their coverage are encouraged to seek options on MNsure, the only place eligible applicants can receive federal tax credits for premiums.
Either way, they should consult with their insurance agents.