North Carolina's insurance department and Blue Cross and Blue Shield of North Carolina, Chapel Hill, announced $155.8 million in refunds for 215,000 policyholders who bought individual plans, thanks to a provision of the Patient Protection and Affordable Care Act. The insurance regulator also approved a smaller-than-requested rate increase for the same policyholders.
The refunds come from reserves set aside for these policyholders. Some premiums in certain policies build up reserves to even out the cost of premiums over the life of the policy. The health reform law will provide new versions of these plans starting in 2014, so the current policies will end sooner than originally expected. That frees up some of the reserves to be refunded. Refunds do not apply to employer-sponsored policies.
For one of these categories of policyholders, the North Carolina Blues requested a 6.97% increase in premiums, but the department approved only a 5.37% increase, which will save policyholders $14.5 million, according to the department. A Blues health savings account plan will see a 2.06% increase in premiums.