By Daniel Meylan – Independent Healthcare Risk Financing Consultant
Over the past week I’ve had multiple advisor conversations across the country from Kansas to Texas to Missouri to Pennsylvania and heard about many Blue Cross fully insured renewal increases that exceed 30%. The way things are shaping up, any 2027 renewal offer from BC under 20% may be considered acceptable, especially for groups of 50 or less.
As we embark on the Q4 renewal season it is quickly becoming evident that it will be a bloody season, especially if you are attempting to negotiate a fully insured Blue Cross (or other BUCA) renewal for a small group. The unfortunate reality is that the individuals that you’re negotiating with at BC are required and expected to bleed BC Blue and look through their BC blue tinted sunglasses at all the issues faced by these employers. That means they’re required to support the BC, claims data, actuarial models, network and PBM contracts that make up their plans. They draw their projected claims and actuarial data from their own BC historical information. They don’t have the capability or authority to think outside the BC box. As we have witnessed with many groups that have moved away from BC to self-funded and level funded plans which feature active cost containment solutions, the risk management methods and processes of BC are outdated and flawed. That flawed system reflects adverse historical results driven by adverse claims data driven by strategies designed to protect BC and not the employer and their members. Shopping other BUCA carriers will probably yield the same results, for the same reasons.
Please recognize the BC staff we all deal with are paid by Blue Cross and therefore have a vested interest in representing the BC perspective on every group plan. They don’t have the authority to even consider alternatives. The bottom line is: at renewal Blue Cross is going to establish rates and policy terms based on what’s best for them not what’s best for the plan and the members.
If you have one of these groups, and you are committed to bringing them a better solution, be prepared to think outside the box. Embrace level funded or self-funded options. Be prepared for more work and hard conversations with your employers about considering alternatives. There are no “easy buttons” here. Having a conversation with an employer with 14 enrolled where 6 members are spending $180K on medications will be a challenge. But so is a $1500/month employee only rate and a $4000/month family renewal rate offered by BC. We are now in a season where selling fully insured group insurance policies is over. As a professional healthcare advisor if you can’t bring a better healthcare risk financing solutions than a BC fully insured renewal you will eventually be rendered irrelevant. One way or the other your group client is going to disappear.