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Financial
Aug 26, 2015

Health Care Costs Set For A Dramatic Price Increase

Sponsored Content provided by Will Brown - Owner, Will Brown Insurance Agency LLC

It may be old news to hear that health insurance will soon become much more expensive, partially as a result of the Affordable Care Act. However I was surprised to learn about the extent to which the costs will increase. According to an article that I found recently in the WIlmington StarNews, Blue Cross Blue Shield (BCBS) of North Carolina admitted that it now seeks an average 34.6 percent higher premium for insurance sold under the ACA.

BCBS also stated in June that it wants to raise rates by as much as 26 percent starting in January 2016, along with this year’s allowed 13.5 percent increase. The company’s stated justifications for the increases are that certain expectations about the health insurance overhaul law haven’t come to fruition.

Healthier customers were supposed to enroll in the second year. People who had been avoiding doctors were supposed to have gotten treatment by the second year. The thought process was that each factor would make the cost of implementing the ACA level out.

“Neither expectation is proving true,” said Patrick Getzen, vice president of BCBS. “Our claims and expenses are higher than our premiums and we need to take steps now to protect the sustainability of plans” for the future. In response to its concerns, BCBS is retrenching its offerings in 16 counties in North Carolina.

What this means is that the company’s Blue Select and Blue Advantage plans will no longer be available in some areas. Getzen said the 55,000 customers impacted by the change will be switched to lower-cost offerings with a smaller network of doctors to choose from for health care.

The main concern is that people who are ineligible for federal subsidies to assist with paying for health care will struggle to keep up with the rising costs. This reinforces the importance of Supplemental Benefit Plans, which cover the gap between what is covered by a major medical plan and what has to be paid for out of pocket.

One of the unfortunate takeaways is that as a result of the rising costs, the trend among insurance companies and employers will be to increase deductibles and decrease the level of benefits that are provided to the insured. Simply put, nobody wants to have to pass on the costs to the employee or individual. To avoid doing this yet continue to maintain business operations, deductibles will have to rise and benefits will have to be reduced.

More and more, Supplemental Benefit Plans will become a critical tool for employees and individuals to fill the gap and ensure the long-term health and stability of their well-being, as well as their finances. This point is strengthened after learning that the Supplemental Benefit Plans offered through Allstate include a wellness benefit, which pays the individual who purchased the plan for going to routine checkups, and that routine health care is one of the most effective strategies for reducing costs and increasing the likelihood of successful treatment.   

To find out more about how supplemental benefits plans can help you reduce costs and provide your employees with peace of mind, please contact me at the number below.

Will Brown is the owner of the Will Brown Insurance Agency LLC, and represents Allstate Insurance Company. Brown and his staff offer property, casualty, health and life insurance, as well as personal financial services and Allstate Benefits, one of the nation’s leading voluntary benefit plans. The Will Brown Insurance Agency has a comprehensive protection and investment product portfolio, with a strong commitment to serving families and small businesses in an advisory role. Will Brown may be reached at (910) 599-9071, or by email at [email protected]. To learn more about the Will Brown Insurance Agency, click here.
 

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