Blue Cross Blue Shield of Michigan to Return More Than $100 Million to Insured Customers and Members for Medical, Dental and Vision Premiums
May 20, 2020
Due to disruptions in previously anticipated health care services caused by the COVID-19 pandemic, Blue Cross Blue Shield of Michigan and Blue Care Network will be returning more than $100 million to many fully insured customers this year. The refunds are in addition to $494 million that BCBSM has invested in expanding the availability of no-cost benefits for members and to support health providers in response to COVID-19 – bringing the BCBSM enterprise’s commitment in response to the crisis to nearly $600 million.
“For 81 years, Blue Cross has stood behind our members’ care in good times and bad,” said BCBSM President & CEO Daniel J. Loepp. “We’ve been proactive in addressing the pandemic, providing no-cost benefits for members and advancing millions of dollars to care providers. Now we can return money to our customers and members.”
“We are living through a great disruption in health care economics, and there is still a lot of uncertainty about where health care spending will go this year,” Loepp said. “But at this point in the pandemic, we’re confident in premiums exceeding claims for the year – so we are starting to give money back to our customers. We hope these refunds allow businesses across Michigan to better cover their employees’ health care and provide our members some relief during a difficult time.”
BCBSM will be providing the following relief to customers and members with Blue Cross and Blue Care Network health plans:
- Fully insured small group customers with 50 or fewer employees will receive a 30 percent credit on their July premium invoice. All told, BCBSM is providing about $37 million back to small group customers for their medical plans.
- Low rate adjustments for small group customers. BCBSM filed 2021 small group rates last week with state regulators that average 0.9 percent more for PPO plans and 1.9 percent more for HMO plans.
- Blue Dental and Blue Vision employer group customers will be sharing a total refund of about $10.5 million. All fully insured groups with dental and vision coverage will receive a one-month premium refund to be credited on their July invoice. BCBSM also will not increase rates for fully insured customers renewing dental and vision plans for 2021.
- Individual health plan members from 2019 will receive a one-time rebate resulting from lower than expected health care claims. Altogether, about $45 million will be paid directly to these 2019 individual plan subscribers in September. Rebates are determined based on each subscriber’s plan and premiums paid in 2019. Rebate amounts will vary by subscriber.
- Medigap (Medicare Supplement) and individual Medicare Advantage members in a plan with a premium above $0 will receive a 15 percent premium refund for the months of March and April to be applied to their July premium bill. This refund totals about $15 million to Medigap and Individual Medicare Advantage members. For Individual Medicare Advantage members this includes their Optional Supplemental Buy-up (if applicable).
BCBSM is also providing $494 million in additional support to members and providers:
- Medicare Advantage member cost share waivers will be provided through December 31 for BCBSM and BCN Medicare Advantage members. On May 7, BCBSM became the first health plan in Michigan to announce that it would waive cost sharing for Medicare Advantage members for all services provided during in-person primary care visits, for in-person behavioral health services and for telemedicine access. The projected value of these no-cost services will save BCBSM and BCN Medicare Advantage members $10 million.
- COVID-19 testing and treatment cost share waivers and no-cost telehealth services will continue to be provided through June 30 to enable free access to physician-directed COVID-19 testing and treatment for commercially insured members. The projected value of these no-cost services will save members $97 million. BCBSM was the first health plan in Michigan to announce testing and treatment for COVID-19 at no cost, along with no-cost telehealth access for both medical and behavioral health services during the first wave of the pandemic period.
- Advance funding for health providers. BCBSM pulled forward $87 million in earned incentive payments to Michigan physicians to enable them to operate, purchase testing supplies, enhance treatment services for COVID-19 patients and expand telehealth services. BCBSM also decided to continue planned payments to health systems, totaling about $300 million, despite disruptions in claim volume. This enabled Michigan health systems to continue operating with a stable revenue stream during a time of significant disruption in their ability to deliver services.
The company’s actions come amid continued uncertainty around the immediate future of health care spending. Typically, insurers like BCBSM base their premiums around the cost of services charged by health care providers, and the trends in utilization of services received by insured members. The pandemic has completely disrupted both cost and trend – making it very challenging to model how much will be spent on health care this year, compared to what was planned prior to the pandemic.
BCBSM will continue to monitor claims trends throughout the remainder of the year affecting potential relief for 2020 individual health plan members and fully insured larger group customers with more than 50 employees. For individual plans, BCBSM continues to work with the federal Centers for Medicare and Medicaid Services (CMS) to seek regulatory guidance for potentially issuing some form of financial relief this year – with concern for not jeopardizing members’ eligibility for Advance Premium Tax Credits if refunds are granted. If claims trends remain lower, the company may take additional actions to provide relief this year to individuals and larger fully insured group customers.
“We are living through a time when the usual economics of health care have been upended,” Loepp said. “Hospitals have delayed elective services, and people aren’t visiting doctors’ and dentists’ offices. Thanks to the decisive leadership of our state officials and the response of our health systems, we are bending the trend of new infections – but the threat of subsequent waves of infection remains. We are being deliberate in projecting future costs given all the unknown variables. The world may return to a new normal at some point, but today, about the only thing we’re certain about is the uncertainty.”
Comprehensive information on the company’s response to the COVID-19 pandemic is available at www.mibluesperspectives.com and www.bcbsm.com/coronavirus.
Blue Cross Blue Shield of Michigan, a nonprofit mutual insurance company, is an independent licensee of the Blue Cross and Blue Shield Association. BCBSM provides health benefits to more than 4.7 million members residing in Michigan in addition to employees of Michigan-headquartered companies residing outside the state. The company has been committed to delivering affordable health care products through a broad variety of plans for businesses, individuals and seniors for 80 years. Beyond health care coverage, BCBSM supports impactful community initiatives and provides leadership in improving health care. For more information, visit bcbsm.com and MiBluesPerspectives.com.