Excellus raising health insurance rates next year
Last Update: 11/26 11:52 am
Syracuse, New York (WSYR-TV) - Health insurance rates are going up for the $700,000 central New
Yorkers covered by Excellus Blue Cross Blue Shield.
The company says it's raising rates by an average of eight percent beginning January 1.
Excellus says the increase is necessary because more people are using health care and the costs of
medical services are going up.
Excellus is also expected to lose money for the first time in 10 years.
Full News Release:
Rate Adjustments for 2009 Required to Meet Health Care Cost Increases
The average premium increase for Excellus BlueCross BlueShield customers, adjusted for membership and benefit changes in all
experience-rated and community-rated products, will be 8 percent in 2009, which is in line with regional projections for next year.
Upstate New York employers who responded to a recent Rochester Business Alliance survey, which includes groups that are
community-rated and experience-rated for their health coverage, forecast an 11.8 percent increase for next year. No other similar
regional surveys have been publicly reported in upstate New York.
Excellus BCBS expects to spend about 90 percent of premium revenue on medical benefits, significantly above the statewide average
of 86 percent spent on medical benefits by other health plans. The health plan is forecasting a loss in net income this year for the first
time in 10 years, and it anticipates achieving a net income of less than one percent in 2009 with the premium adjustments announced
today. To offset both weak financial performance as well as investments required for customer service improvements, the health plan
also implemented a temporary hiring and promotions freeze, put a hold on base pay increases for management in 2009, offered a
voluntary early retirement program, and implemented other measures.
At the same time, the health plan has maintained levels of quality, service and customer satisfaction, which have earned it statewide
and national recognition.
Greater use of health care services and higher costs of medical goods and services are principally driving the increased cost of
coverage, no matter what form of coverage customers have. Most employers now offer experience-rated or self-funded coverage. Only
about 10 percent of the health plan’s privately enrolled members in the Central New York region have community-rated coverage.
Individual and family premiums vary from product to product and are impacted by the optional benefit riders that customers choose.
Each employer group’s claims history experience will determine rate adjustments for experience-rated and self-funded plans. The
average increase among Excellus BlueCross BlueShield community-rated products is 12.2 percent.
“We have a product at every price point, so there are options available to help keep coverage affordable,” said Jim Reed, regional
president for Excellus BlueCross BlueShield. The latest innovative product, HealthyBlue offers up to $1,000 per family for members who
already engage in healthy behaviors as well as those who become more proactive about their health. The monthly single premium of
$324.20 and family premium of $886.57 for HealthyBlue provides a lower-priced alternative to other more expensive plans.
“Upstate New York isn’t immune to national trends in health care costs,” Reed said. “With access to new drugs, new technologies and
the advancement in medical procedures, people are surviving diseases such as cancer or events such as heart attacks in greater
numbers. We all know someone who has had a knee or hip replaced, allowing them to remain active and vital. These medical advances
aren’t free. A single knee replacement costs more than $14,000 and a single cancer drug can cost more than $100,000 a year.”
With the oldest of the Baby Boom generation now in their 60s, health care costs are continuing to increase because more people are
using more health care services than ever before. Excellus BCBS has seen increases in the use of hospital services, emergency room
visits, and laboratory tests. Brand-name prescription drug costs have risen dramatically as well, along with increased state taxes on the
Adding billions of dollars to health care costs locally and nationally are conditions that could be improved by lifestyle changes. Nearly 62
percent of upstate New York adults within 39 counties – or 2 million people – fell into the overweight and obese categories in 2006.
Poor dietary and exercise habits place them at risk for serious health conditions that cost an estimated $1.1 billion in additional medical
care. About 23 percent of upstate adults smoke. According to the Centers for Disease Control and Prevention, each smoker accounts
for an annual health-related economic loss of $3,561. With 900,000 smokers living within 39 counties, that estimate would mean $3.2
billion in losses occur from just one deadly habit.
To help encourage healthy behavior changes and thereby reduce costs, Excellus BCBS created and promoted the personalized Web
tool StepUp to encourage weight loss among the entire community, and it offers smoking cessation programs through many of its
product offerings. HealthyBlue is the latest initiative by the health plan to build healthy incentives directly into a product design.
“We’re also encouraging our members to continue taking advantage of the savings associated with generic drug options,” Reed said.
“And, we’re working with hospitals to help address hospital-acquired patient infections to help save lives, reduce infections and save
millions of dollars.” Excellus BCBS is also investing in programs to manage chronic conditions such as asthma, diabetes and coronary
artery disease and to manage large dollar cases such as high-risk pregnancies, HIV/AIDS, and cancer. It continues to work with local
hospitals and physicians to improve care and reduce unnecessary costs.