Big Losses for BCBS Arizona

Obamacare plans have meant big losses for BCBS Arizona.  Blue Cross Blue Shield of Arizona has always been a big player in the individual health insurance market and they probably turned a profit in the past.  But new, sicker customers have left BCBSAZ paying out much more money than they have taken in.

In a recent email, BCBSAZ told brokers they lost $185 million over the last two years.  Ouch!

BCBSAZ has not offered the lowest-cost health insurance plans in Arizona over the last three years.  But BCBSAZ has offered the biggest network – and that might have attracted customers with health problems.

When I talk to my clients about various health insurance plans, I ask them for a list of their doctors.  When someone has no doctor – or just one doctor – a small network plan will work for them.  Plus, that person probably has no health problems.

When someone gives me a long list of doctors he sees, that usually means he has health issues – and he needs a plan with a big network that includes all or most of his doctors.

A big network meant big losses for BCBS Arizona.

People with a list of doctors they want to see would choose BCBSAZ as their plan because their doctors were in the big BCBSAZ network. So even though BCBSAZ had higher premiums than most Arizona individual health insurance plans, it turned out that BCBSAZ did not charge high enough premiums to cover the claims of their customers – to the tune of $185 million in losses.

What will 2017 look like after the big losses for BCBS Arizona?

BCBSAZ is the only company that filed paperwork to sell individual health insurance plans in every Arizona county in 2017.  BCBSAZ has not yet said if they will actually offer plans in rural counties like Cochise, Santa Cruz, Yavapai, and Mohave.  BCBSAZ could decide, like other companies, to only offer plans in Maricopa and Pima counties where they have bigger markets and perhaps better contracts with hospitals and doctors.

If BCBSAZ decides to stick to the urban markets (Maricopa and Pima counties), that will leave people in the rest of the state with no individual health insurance options. That will be a big problem in places like Prescott, Flagstaff, Sedona, Nogales, Benson, Yuma and Kingman.  I have clients in most of those towns and those people need health insurance.

I wrote about “the end of health insurance in Arizona” last month.

Health Net to cancel PPO plans.

I just got a mailing from Health Net saying they will no longer offer PPO plans in 2017. PPO plans have bigger networks and even national networks. PPO plans have turned out to be money losers, so the future for individual health insurance will be all about small, local networks.

If there are no big network plans available in Arizona, that is going to be a problem for some of my clients who are going to have to give up their doctors.

The upcoming Open Enrollment Period is going to be “interesting” to say the least.  (Working with Medicare clients is so much easier!)



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