Lower-than-Expected Premiums Coming for BCBSM Small Business Customers
by Blues Perspectives
| 3 min read
Delivering predictable health insurance premium rates to small businesses is a top priority for Blue Cross Blue Shield of Michigan. This is more important than ever, as we continue to see the effects from the COVID-19 pandemic continue to impact our communities.
Small businesses in Michigan make a big difference. Michigan’s small businesses employ nearly half of the state’s workforce. Yet small budgets often force owners to make difficult choices during economic storms: when costs pile up quickly, owners may have to choose between offering their workers health insurance benefits or hiring a needed employee.
By moderating premiums over time, Blue Cross helps the 900,000-plus small businesses across the state be confident that their budgets will be able to manage any season of change. Blue Cross continuously monitors rate trends for its small business customers.
Small group PPO customers renewing in the third and fourth quarters of 2023 will see lower-than-expected statewide average rate increases on their Blue Cross Blue Shield of Michigan plans. Following favorable emerging claims experience, the Q3 and Q4 small group PPO statewide average increase was adjusted from 5.3 percent to one percent, a more than four percent drop representing Blue Cross’ ongoing effort to moderate costs. While rate adjustments will vary by region, re-filed average rates will consist of a one percent increase for BCBSM PPO plans (pending regulatory approval), and average increases for BCN HMO plans will remain at the previously filed 6.6 percent.
These small average increases, coupled with average rate reductions Blue Cross has provided the market in recent years, have kept overall costs for health insurance predictable for small employers. Since 2015, overall small group rates have remained moderate, delivering reliable coverage at a predictable price point for small businesses.
Health insurance costs and health care costs are linked. Blue Cross’ ability to stabilize pricing for small businesses is due in part to more than a decade of work with its physician and hospital partners to improve the delivery of health care. Through initiatives like Patient-Centered Medical Homes and Value Partnerships, preventative care is being emphasized at the doctor’s office to cut down on repetitive tests and readmissions to the hospital.
In addition, a growing number of Michigan physician organizations and health systems are signing on to Blueprint for Affordability, a value-based reimbursement model that promises to further drive down inefficiencies in health care and improve outcomes for patients. Through an investment in the nonprofit drug company Civica Rx, Blue Cross is also taking action to stabilize the cost of prescription drugs.
In addressing these root costs of health care services, Blue Cross can return the savings to its customers. Instead of cost spikes that cause small business owners to avoid offering health insurance to their employees, Blue Cross continues to offer small businesses high-quality insurance at rates they can plan for.