More than 180,000 members with commercially insured individual health care plans through Blue Cross Blue Shield of Michigan and Blue Care Network will receive one-time credits on their health plan premiums this fall. As a result of disruptions in the health care and dental industries due to the coronavirus pandemic, Blue Cross has experienced lower than expected health care claims and is able to return a portion of premiums back to members. The credits total more than $21 million. The credits apply to active subscribers who purchased individual health and/or dental plans. Members will see a one-time, 30% credit applied to their health and dental plan premiums on their November invoice. The amount will be applied equally to all members purchasing individual or family plans. For a member who purchases a plan directly from Blue Cross, the premium credit will simply equate to a 30% reduction from their November bill. For members who purchase their plans on the federal marketplace, the final impact of the premium credit will depend on the amount of their insurance that is subsidized by the federal government through a mechanism called the advanced premium tax credit. The 30% credit will be applied to the total premium, and the credit amount will then reduce the member’s share of their premium. If the credit amount is larger than what a member would typically pay that month, any remaining amount would then reduce the amount that the federal government pays as a subsidy. Here are three examples of how the credits could affect members who purchase their coverage on the federal marketplace:
- John has a base premium of $1,000 per month, but qualifies for a full government subsidy, known as an advanced premium tax credit, in the amount of $1,000. John typically pays $0 per month for insurance. When the 30% premium credit is applied, John’s total November premium is now $700. The federal government pays the $700, still covering the entire cost of John’s premium.
- Jane has a base premium of $1,000 per month, but her insurance is partially subsidized by the federal government through an advance premium tax credit. She typically pays $200 a month and the government pays the remaining $800 a month. When the 30% premium credit is applied, Jane’s total November premium is now $700. The $300 credit amount is larger than her typical monthly payment. The credit amount first reduces her share of the bill to $0, and the remaining $100 reduces the government’s portion to $700. In this example, the federal government covers the remaining November premium.
- Joe has a base premium of $1000 per month, but his insurance is partially subsidized by the federal government through the advanced premium tax credit. Joe typically pays $500 a month and the government pays the remaining $500 a month. When the 30% premium credit is applied, Joe’s total November premium is now $700. The federal government will still pay $500 in November, and Joe’s obligation will now be reduced to $200.
These credits are the latest in a series of actions Blue Cross has taken to help customers and members through the uncertainty of the pandemic. Earlier this year, Blue Cross announced more than $100 million in credits to senior members, employer group customers and 2019 individual plan subscribers on their health, dental and vision premiums. Blue Cross also has invested more than $150 million in expanding health benefits to its members during the pandemic, including fully covering all COVID-19 treatment for fully insured members through Dec. 31, 2020. More from MIBluesPerspectives:
- New Blue Care Network Plans Provide Options for Members, Customers in Uncertain Times
- Blue Cross Blue Shield of Michigan is Here for it All
- Community Health Centers Play Important Role in Addressing Care Disparities
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