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Blues exceed government-minimum payouts for care

Rochester Business Journal
June 10, 2014

Excellus BlueCross BlueShield’s medical-claims payout over the past three years topped minimums set under federal and state laws by $864 million, Blues officials said Tuesday.

In provisions meant to cap health insurers’ administrative costs and profits, the Patient Protection and Affordable Care Act and state laws in place since 2010 require health insurance carriers to spend at least 85 percent of premiums collected from group-plan enrollees, and no less than 82 percent of individual subscribers’ premium payments, on claims.

In 2011, Excellus refunded $21.4 million to subscribers to make up for 2010 administrative costs and profits that topped the new minimums. It was among 11 of the health insurance carriers the state ordered to make such refunds.

Since then, Excellus said, it has spent more than 90 percent of its premium revenues on medical claims, capping its profits and administrative costs at less than 9 percent of group-plan premium revenues and less than 6 percent of premiums collected from individual subscribers.

The Blues calculate that over the past three years they spent $42 million more than the minimum to pay individual subscribers’ claims, paid out $221 million over the minimum on small-group claims and topped the minimum payout requirement on large-group subscribers’ claims by $601 million.
  
(c) 2014 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or e-mail service@rbj.net.
 

 


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