Blue Cross of Florida Swings for Fences

May 29, 2010 • Insurance Health Articles • Comments • • Tags: Blue Cross, Florida

?Just when you thought you were happy or comfortable with your Blue Cross Blue Shield of Florida health insurance plan, here comes the bad news. There is a large increase coming for everyone regardless of when you signed up. Here is a list of the effected populations:

Rate Increase Products

Individual U65 BlueChoice®,
BlueSelect®
Florida Farm Bureau
BlueOptions® Products
Large Group
Small Group
Individual Under 65
Medicare
Group Medicare

If you are a Blue Cross of Florida policy holder, now is a good time to fill out the quote form above and start shopping health insurance plans!

Here is the agency email received by agents to give us a heads up of the coming news so we can break it to you our trustful clients.

The purpose of this bulletin is to provide you with information on the upcoming rate increase for all Individual Under 65 BlueChoice®, BlueSelect®, Florida Farm Bureau and most BlueOptions® products. (This excludes BlueOptions Temporary
Plans 562-563, all Hospital-Surgical products and GoBlue.) This year’s implementation continues to include the alternate offer process and the transition to the restructured rate environment for impacted members. Carefully review the following
information.

And here are some relative estimations,

Rate Increase Percentage, Effective Date & Implementation: The Office of Insurance Regulation (OIR) approved an 11.2% rate increase for BlueChoice (Underwritten & Guaranteed Issue), BlueOptions (Underwritten and Guaranteed Issue),
BlueSelect and Florida Farm Bureau products. The new rates are effective June 1, 2010 and will be implemented based on the subscriber’s first paid-to date that falls on or after June 1. Approximately 197,000 contracts representing 319,000
members will be impacted by this rate action. The last rate increase experienced by these members occurred June 1, 2009.

How you will find out

Customer Mailings: The first round of rate increase notification packages will be mailed April 13-16, 2010. These notification packages will be mailed using a staggered approach with daily mailings scheduled to continue through the third
quarter of 2010.

Your Choices

Remember, these letters were addressed to us, so these instructions are to agents not to policy holders.

Alternate Product Offer Including Rate Quote

In conjunction with this rate increase we are continuing the Alternate Offer program. This process has been very successful and has enabled us to retain over 95% of customers who contact us. With Alternate Offer, we suggest a
specific lower cost alternate insurance plan to the subscriber and we include the monthly premium that will apply to that subscriber’s coverage if they choose to transfer to the alternate product. This immediately displays to them the
monthly premium savings available.

Monthly Premium Criteria (Underwritten Customers Only)

If the monthly premium for the alternate product is equal to or less than the subscriber’s monthly rate today (pre-rate increase), then the customer will receive a specific Alternate Offer (presuming other criteria are satisfied).

If the monthly premium for the alternate product is more than the subscriber’s monthly rate today (pre-rate increase), the customer will not receive a specific alternate offer. Their letter will contain general verbiage around other lower
cost products that are available and will encourage them to contact us.

The Alternate Offer process was designed and built to support all Individual Under 65 products. There is a variety of different scenarios requiring different letters. All letters have been assigned unique letter codes that appear at the
bottom of each letter.

Depending on which rate increase letter you get, the alternative products are listed below.

. BlueChoice with optional maternity if the Alternate Offer is BlueChoice. The suggestion will be to increase their deductible in BlueChoice.
. BlueChoice without optional maternity when the Alternate Offer is BlueOptions.
. Most BlueOptions & BlueSelect Plans (with or without optional maternity).
. Most BlueOptions HSA-compatible plans.
. Florida Farm Bureau (FFB).

BlueChoice with optional maternity when the Alternate Offer would be BlueOptions. This letter does not include a specific Alternate Offer because the structure of the optional
maternity benefit available with BlueOptions is entirely different than what is available with BlueChoice. Further, there are two different BlueOptions optional maternity benefits
available with different and separate deductible amounts. Customers are encouraged to contact us for more information.

Guaranteed Issue (Choice & Options). There are no alternate products for this population.

The above categories represent the majority of subscribers involved in this rate action.

Criteria for alternate offer not met (i.e., the rate for the alternate offer product is higher than their pre-rate increase premium, they changed products within the last 180 days, they were a new sale within the last 180 days, etc.)

Current product is a non-HSA plan and the Alternate Offer would be an HSA-compatible plan.

. The current product is a non-HSA compatible plan with optional maternity and the alternate offer would be an HSA-compatible plan. This letter does not include a specific Alternate Offer. While enrollees are eligible to transfer into an HSA-compatible plan, optional maternity is not available with the HSA-compatible plans.
. BlueOptions Plans 81 and 98 (with or without optional maternity).
. Highest deductible HSA-compatible Plans with BlueRx Discounts Program

BlueOptions MyBasic Plans 82 & 582.

Sample letters are attached for your reference. Where an Alternate Offer is made, the applicable Benefit Authorization
Form and a Business Reply Envelope will be included in the package.

Restructured Rates

Impacted BlueChoice and BlueOptions customers will continue to be transitioned into the restructured rate environment. This transition plan was negotiated with and approved by the OIR. As a reminder, rate restructuring is a required routine
industry practice that insures continued financial integrity and regulatory compliance of our rates. It is revenue neutral to BCBSF. To ensure our rates remain correct, appropriate and consistent, we analyzed the rate relationships between
different benefit plans, different deductibles, different geographic areas, etc., along with structural factors for age, gender, county, etc. This detailed review resulted in the development of restructured rates that brought the entire state into
alignment so that everyone pays a fair and equitable premium for the coverage they maintain. Virtually every rate at every age in every county changed. On Oct. 1, 2006, restructured rates were implemented for all new sales into Individual
BlueOptions and BlueChoice products that occurred on or after that date. All new IU65 products introduced since that date have been developed at the Restructured Rate level.

Members enrolled prior to 10/01/06 are in the non-restructured rate environment. These are the customers who will be impacted by the transition and they will receive the following additional reminder message printed on the reverse of their
rate adjustment notification letter.

NOTICE OF RATE RESTRUCTURE

To ensure you’re receiving health insurance rates that are appropriate, accurate, and fair, our BlueChoice and BlueOptions Individual Under 65 products have undergone a rate restructure. This is a standard industry practice. It ensures your
premiums best reflect the appropriate rates for your age, gender, and county where you live. Rate restructuring is different from rate changes, which are typically rate increases due to rising medical costs, trends, and age. The Office of Insurance
Regulation has approved this rate restructure. The restructured rates will continue to be implemented gradually over the next several years.

Inquiry Support

Product specific toll-free numbers are provided in the rate notification letters. These lines will be staffed by Intermedia, an external vendor that has supported rate increase activities for the Individual Under 65 products for several years and is very familiar with our products, retention practices and all aspects of this initiative.

Rates
Rates will be available on accessBlue by close of business on Wednesday, April 14, 2010.