Blue Cross of Northeastern Pennsylvania has filed with the state for double-digit premium rate increases for a number of its customer products.
The rate hikes are needed to help the Wilkes-Barre-based insurer keep pace with rising health care costs, said company spokesman Anthony Matrisciano.
"We are projecting additional revenues of $10.1 million if all rate hikes are approved as requested," he said.
The increases, in some cases, will impact low-income customers, Matrisciano said.
If approved, the higher rates will go into effect Jan. 1, 2011.
The company is using about $10.5 million from its $252 million surplus to help offset the increased prices.
"We are trying to keep them (premiums) affordable for members, which is why we are subsidizing," he said.
Rate hikes of 15 percent are being requested for Special Care, BlueCare Cooperative and BlueCare Major Medical, some of the insurer's Community Commitment Products, or guaranteed issue products, that don't exclude customers with pre-existing conditions.
In many case, Matrisciano noted, those products target low-income customers.
He explained that the company actually needs to raise premiums 84.5 percent for Special Care. However, to make up the difference, it is taking $2.6 million from its surplus.
Just more than 4,600 members are enrolled in Special Care.
"In 2009, we paid out $1.30 for every $1 we took in claims for Special Care," he explained.
A 55.5-percent increase is needed to cover 5,077 members enrolled in BlueCare Cooperative, he said.
"To make up the difference, we expect to subsidize by $5.4 million from the surplus. In 2009, we paid out $1.21 for every $1 took in," he said.
BlueCare Major Medical, a supplement plan with 4,360 members covering doctor visits, prescriptions and durable medical equipment, seeks a 15-percent rate hike as well. The company expects to subsidize the plan with $2.5 million. The company paid out $1.28 for each $1 it collected last year.
A 15.2-percent rate hike is being requested for BlueCare Security, a Medicare supplement covering nearly 33,000 members.
The largest rate hikes are being sought for BlueCare PPO Individual Conversion, 27 percent, and BlueCare HMO, 22 percent.
Together, those two products cover just more than 1,000 members.
A 15-percent rate hike is being sought for BlueCare Direct, which covers 1,728 members and is designed for early retirees, students or others whose employers don't offer coverage.
A 19.4-percent rate hike is being requested for BlueCare Senior Major Medical, a group product offered by employers to retired workers.
"We need a 37.4 percent (rate hike)," Matrisciano said, "so we expect to subsidize it by $16,500 from the surplus. We pay out $1.12 for every $1 we take in."
He noted that Blue Cross used $16.3 million of its reserves to offset premium rate hikes last year.
The surplus was as high as $462 million in 2007.
"The surplus has decreased by over 46 percent over two years, due in part to reduced investment income," he explained.
