Blue Cross Blue Shield of Michigan says it will issue 30% premium refunds in November to people with individual health insurance plans as a result of fewer claims during the coronavirus pandemic, although the insurance giant still plans to raise premiums in 2021 when demand for health care is expected to return.
The $21 million in refunds will go to more than 180,000 policy holders of Blue Cross individual and dental plans. The refunds, which are pending approval from state regulators, will be delivered in the form of premium credits for 30% off customers' November invoices.
The Blues said it saw fewer claims this spring because of the disruption of many non-emergency medical procedures and dental services during the COVID-19 crisis. That disruption put a financial strain on many hospitals and medical centers prompted an earlier round of Blue Cross premium refunds.
Under the Affordable Care Act, health insurers must issue rebates for individual plans if they collect too much premium, which is considered spending less than 80 cents of every collected $1 on claims.
Come next year, Blue Cross expects people to have returned to visiting their doctor's and dentists' offices.
That is why The Blues is seeking an average 2.5% premium increase in 2021 for its individual market Blue Care Network HMO plans and a 1.7% increase for individual market Blue Cross plans.
Additionally, it wants an average 1.9% increase for its Blue Care Network small group plans and 0.9% for Blue Cross small group plans.
All of those planned increases are pending approval by regulators.
"Heading in to 2021, Blue Cross expects additional health care costs as people seek non-COVID-19 care they deferred earlier this year coupled with future COVID testing, treatment and potential vaccines," Blue Cross spokesperson Helen Stojic said in a statement.
More: Blue Cross Blue Shield to issue customers $100M in refunds because of coronavirus
Blue Cross says it has about 50% of the individual health insurance market in Michigan and 60% of the small business market, which is groups with 50 or fewer full-time employees.
Other health insurers in Michigan have also announced similar COVID-related rebates for 2020, including Health Alliance Plan (HAP), Priority Health, Total Health Care USA, Aetna, Meridian, UnitedHealthcare and Physicians Health Plan (PHP).
Contact JC Reindl at 313-222-6631 or jcreindl@freepress.com. Follow him on Twitter @jcreindl. Read more on business and sign up for our business newsletter.
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