Blue Cross Blue Shield TX to Discontinue PPO Plans in 2016
In a surprise announcement last week we learned that Blue Cross Blue Shield of Texas will stop offering individual PPO health insurance plans in 2016. They cited a $400M loss on their PPO book of business as the driving reason behind this move.
The big question everyone is asking us now is, “What can we replace our BCBS of TX PPO plan with in 2016?” The answer will not be available until sometime in October when details of 2016 plan offerings are to be released to the public. We hope there will be alternative PPO options in Texas for 2016, but unfortunately the national health insurance trend is towards more HMO/EPO style plans and away from PPO as insurers look for ways to remain profitable while still working within the parameters of the Affordable Care Act. We remain somewhat hopeful that there will be a PPO offering in Texas for 2016.
Check back with us in October and we will be able to provide more specific details on alternatives for 2016. Rest assured if we hear something before then we will get it out ASAP!
Below is an excerpt from the BCBS of TX press release:
Why is BCBSTX discontinuing the Blue Choice PPO?
For the past two years, BCBSTX has been the only health insurer offering an individual PPO plan in all Texas markets. BCBSTX found that the PPO is not sustainable at an affordable price due to anti-selection. BCBSTX will continue to offer other plan options in all 254 counties, on and off the Marketplace.
What will this mean for individual members who currently have the PPO plan?
BCBSTX will be transitioning affected individual members to another plan, so you will not experience a gap in coverage. You will also have the option of choosing a different plan during 2016 open enrollment.
Are there providers who were available under the PPO who will no longer be in network for BCBSTX members on any plan?
There are some providers who were in BCBSTX’s individual PPO plans networks who will no longer be an in-network option for individual members, except those in grandfathered plans. These providers declined to participate in the Blue Advantage network.
If you are seeing a provider who will no longer be available to you through the new plan’s network, BCBSTX will work with you to find a new provider. If you are currently undergoing a course of treatment, BCBSTX will work with you and your providers to minimize the impact to your care, just as if you changed plans for any other reason.
BCBSTX continually seeks opportunities to work with providers to offer the best solutions for our members.
Will there be a rate increase for HMO for 2016?
BCBSTX’s rate filings are currently under review by CMS, so that information won’t be available until rates are finalized and approved. BCBSTX pricing is designed to allow the insurer to offer sustainable products and services to its customers for years to come. A medical loss ratio (MLR) requirement is in place to protect consumers by requiring a high percentage of premiums to go to medical costs. If that requirement is not met, customers may be eligible for a premium rebate.
What would have been the rate increase for PPO for 2016 if it was still available?
A plan’s success requires the right ratios of enrollees to providers, and of the amount of premiums paid in to amounts paid out for care provided. In the 2014 individual business, BCBSTX paid out millions more in claims than it collected in premiums. Losses that high are not sustainable. Like any business, BCBSTX must make necessary adjustments. There were no options that kept the PPO sustainable and still allowed for other plans to be offered across the state.
Why couldn’t you just continue offering the PPO and increase the rate for it?
Under ACA, individual business is rated using a single risk pool, meaning all individual plans had to be looked at together. This means BCBSTX couldn’t just look at the pricing of the PPO separately. If BCBSTX had kept both the PPO and HMO, it would have added dramatic costs for every member with an individual plan.
Is group subsidizing individual business?
The group line of business operates separately from the individual line of business. BCBSTX’s group rates are based on expected cost of doing business for 2016 for group business.
What can I do now?
This announcement does not affect your coverage through the end of the year. There is no need to do anything right now.
Shopping for 2016 plans is expected to open Oct. 10, when insurers are allowed to publicly release the full range of plan offerings for the coming year. You will receive a formal notice from BCBSTX by Oct. 1 that will give you the details of your plan changes.
To learn more about why we recommend PPO plans for RVers and other health insurance recommendations please read our Health Insurance Resource page.