Columbia, S.C. — BlueCross® BlueShield® of South Carolina and BlueChoice® HealthPlan are mailing rebate checks this week to individual customers. Next week, rebates will go out to small business owners. Rebate amounts are based on overall claims for 2011 and other complex calculations by which the federal government has established medical loss ratios, or MLRs.
Under the Affordable Care Act, health insurers must issue rebates if they do not meet certain MLR targets. For individuals and small groups, the MLR target was 80 percent for 2011. Basically, that means an insurer had to use 80 cents out of every dollar submitted in premiums for paying customers’ medical claims and for other specific activities. BlueCross is issuing rebates in those markets because it fell slightly below the 80 percent target. No large groups are eligible for rebates since BlueCross did meet the large group target of 85 percent.
Rebate amounts vary from group to group and member to member. Most payouts are less than $200. Rebates are being mailed directly to members with individual policies and to small group employers. (For rebate purposes, the federal government defines “small groups” as those with two to 50 full- and part-time employees, including seasonal help.) Small group employers have the option of returning a portion of the rebates to their employees or reinvesting in the company to offset future health care costs.
According to Jim Deyling, president of private business at BlueCross BlueShield of South Carolina, governmental MLR requirements do not address the root cause of rising health care expenses. “We are complying with the law, but our concern remains that a rebate such as this not only creates a false impression of overpricing, but also reveals the fundamental flaw of the legislation, which is that it does nothing to reduce health care expense for members,” Deyling said.
“In addition to keeping our profit margins below 3 percent, we want our customers to know that BlueCross BlueShield of South Carolina continues to be innovative in our approach to reducing rising health care costs. We are actively working with providers and employers to identify ways to keep premiums as affordable as possible. We are also leading the way in rewarding providers for the quality of health care services they provide rather than the quantity of those services. We believe these efforts will make our members healthier in the long run as well as reduce costs.”
Headquartered in Columbia, S.C., and operating in South Carolina for more than 65 years, BlueCross BlueShield of South Carolina is an independent licensee of the Blue Cross and Blue Shield Association. The only South Carolina-owned and operated health insurance carrier, BlueCross BlueShield of South Carolina comprises 47 companies involved in health insurance services, U.S. DoD health program and Medicare contracts, other insurance and employee benefits services, and a philanthropic foundation that funds programs to improve health care and access to health care for South Carolinians. BlueChoice HealthPlan (www.BlueChoiceSC.com) of South Carolina also is an independent licensee of the Blue Cross and Blue Shield Association.