Independence Blue Cross Rate Increase for Individual Medically Underwritten Plans

We at Custom Benefit Plans, Inc. would like to share with you the following April 2, 2013 update from Independence Blue Cross regarding upcoming changes to individual medically underwritten HMO and PPO products. The "eBulletin" is as follows: 

Important changes to IBC's individual medically underwritten plans

We want to let you know about two upcoming changes to our individual medically underwritten HMO and PPO products that will impact our members. The first change is that we are implementing a monthly rate increase for our individual medically underwritten HMO plans, effective July 1, 2013. Additionally, we are notifying members enrolled in our HMO and PPO products who have moved into a new age bracket about an adjustment to their premiums.

Why are rates increasing for individual HMO plans?

Increasing premiums is not a decision we make without carefully considering all options. To continue to provide our members with high-quality coverage in the face of rising health care costs, it is necessary for Independence Blue Cross (IBC) to implement an 8.9 percent rate increase for all of our individual medically underwritten HMO plans only, effective July 1, 2013. This rate increase has been approved by the Pennsylvania Insurance Department and affects monthly premiums.

Rates for our individual plans are based on five-year age brackets. As a result, some members will experience an additional increase if they or the oldest family member covered under their policy:

• have entered a new age bracket since July 2012, when IBC last adjusted premiums based on age;
• or will enter a new age bracket when the rate increase goes into effect on July 1, 2013.

The base rates for our individual medically underwritten PPO plans are not increasing. However, we will adjust rates for PPO members who have moved into a new age bracket. Similar to our HMO plans, rates for our PPO plans are based on the age of the oldest family member covered under the policy.

Will members be able to select a lower-cost coverage option?

Yes. Because we understand that some members may want to consider changing their current coverage, we are providing members with information about lower-cost coverage options available to them. The letter members will receive includes a benefits overview to help them compare plans along with a Plan Change Request Form that they need to complete and return if they want to choose a step-down option. Members enrolled in our lowest-cost option, PPO 8000 Deductible, and our Medicare eligible members, will not receive step-down options.

Are there any members who will not experience a rate increase in July?

Yes. New individual medically underwritten plan members are entitled to a rate guarantee for the first six months of their coverage. The following chart shows the effective dates for new members subject to the rate guarantee, and when their rate increase/age bracket adjustment will be implemented.

When will HMO and PPO members see the rate adjustment on their bill?

All HMO and PPO members will see the adjustment to their monthly premium reflected in their July billing notice. Members who mail their payment to IBC do not need to take any action other than to pay the new premium. We are asking members who pay their premiums through a monthly automatic bank withdrawal to make note of the new amount that will be deducted from their account beginning on July 1.

Communications

On April 30th, we will send a letter to HMO and PPO members with details about the rate increase. Members who receive the six-month rate guarantee will be notified about the rate increase 45 days prior to the expiration of their rate guarantee and the effective date of their new rate.

Members who are 65 or older by July 1, 2013, will receive a custom letter explaining that their rate may be lower if they also currently have Medicare coverage. These members will not receive alternate plan options.

If they have questions, members can visit the Change My Plan website, contact their broker, or call 1-888-249-2118.

If you have any questions, please contact your IBC account executive.