It’s a strange business, this health care stuff. I mean, what else do you use in your life that is so hard to predict? What else do you use or buy where you know so little up front about costs?
There are thousands of health care vendors in Louisiana that you might use – people and places like hospitals, urgent care clinics, primary care doctors, specialists, labs, imaging centers, physical therapists, pharmacies, etc. The list seems endless. And of course, some kind of deep-pocketed, third-party payer is a must to help you pay for it all.
If you’ve ever heard me in a speech, media interview or compliance seminar, you’ve probably heard me say this:
“The one thing we have done in health care here in the USA that no other country can touch is we’ve managed to design a system that NO ONE can afford to pay for out of their own pocket if they get sick.”
I’ll stand by that. We’ve written about the actual costs of health care on several occasions, and it’s murky and always seems to cost more than we think. What can you actually trust in this system?
When Your Health Plan Pays You
In March 2010, when Congress approved and President Obama signed the Affordable Care Act, they laid upon health insurance companies like Blue Cross. And we were glad to accept that responsibility on your behalf.
Health insurance companies have federally monitored and regulated caps on their profits. And gross margins. And have to guarantee their customers that a very large percentage (typically as much as 85%) of the premiums they pay them goes ONLY toward paying for their health care. But at no time were any caps on profits put on any other health care entities. Not hospitals, clinics, urgent care, docs, pharmacies, labs, medical equipment suppliers – NONE OF THEM have any limits on their profits or requirements about how much of the money they take in from patients has to go directly back to paying for their care. ONLY health insurance companies do. Think about that…
So Mike, what happens when a health insurance company makes too much money?
Believe it or not, we give the excess back to the customer. When we have savings, we share it. We give REBATES.
Typically, these rebates, in our business model, arise because people don’t use as much health care as we thought they would OR some of our cost-saving measures are working beyond our expectations. That’s what happened to two slices of our business back in 2021, and we are returning money to them through rebate checks.
Who Is Getting a Rebate?
Certain individual members and members of some large employer groups used less health care than we predicted. We continue to see more savings from our Quality Blue program that rewards health care providers for getting better results all while we make every effort to hold down the cost of prescription drugs. A successful combination of these things means that this year, we are issuing rebates to about 30,000 of our members. Money back to them, or their employer plans.
The first group of members eligible for rebates are people who owned Blue Cross-branded individual plans during 2021 like Blue Max, Blue Saver, Blue Value and Blue Select. If you were on one of those plans and you’re eligible for a rebate, you should get a letter explaining the rebates, then a check by the end of the month.
The second eligible group were companies that owned large-group HMO Louisiana plans during 2021. Eligible companies also will get letters explaining why they are getting rebates during September. The employers will get rebate checks and must use the funds to either reduce employee premiums or give cash rebates to eligible employees, since the money is coming back through the company health plans.
We take our responsibility to spend the majority of premium dollars on our members’ health care needs VERY seriously. And because we are the only health care player regulated in this way (you’ll never get a rebate from your doctor, hospital or drug company, trust me!), we will be completely transparent with you about how Blue Cross spends your money.
I feel that trust every morning when I wake up. Last year we managed almost $8 billion in premiums and claims costs for our members in group and individual health plans. To be trusted with that kind of money and be in business for 88 years in a row with that kind of trust, is very precious to all of us here.
I just want to straight out thank you for your trust in us, again. And where we have savings, we will certainly try to share it with you, every time.