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September 25, 2020 04:35 PM

Blue Cross NC to spend $200 million in legal winnings on members

Shelby Livingston
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    Modern Healthcare Illustration / Getty Images

    Blue Cross and Blue Shield of North Carolina said Friday that it is using its legal recoveries from a successful lawsuit over unpaid Affordable Care Act risk-corridor funds to help members with health, wellness and household expenses during the COVID-19 pandemic.

    The N.C. Blue affiliate said it will mail $200 million in retail cards to more than 600,000 members in October and November to help them pay for over-the-counter medications, groceries, first-aid supplies, vitamins, exercise equipment and other items at a variety of retailers.

    The retail cards will have a pre-paid balance of $100 to $500, depending on the plan the member is enrolled in. Eligible members are those enrolled in individual and fully insured employer plans, including vision and dental plans.

    Blue Cross NC said it is funding the cards using money it received from the federal government after winning its lawsuit over unpaid risk-corridor funds. The U.S. Supreme Court ruled in April that health insurers are owed more than $12 billion in unpaid funds through the now-expired ACA program, which was meant to protect health insurers from significant losses on the exchanges. Blue Cross NC was one of four insurers involved in the consolidated cases before the high court.

    The Supreme Court remanded those cases to the lower court for further proceedings, and in July, the U.S. Court of Federal Claims entered a judgment of $356.3 million to Blue Cross NC for the years 2014, 2015, and 2016. Dozens of other lawsuits over the risk-corridor program have also been resolved.

    Blue Cross NC said it used the remainder of the recovery to keep 2021 premiums for many of its customers lower. The insurer's rates for individual ACA plans will decrease about 1% next year.

    Legal and insurance experts had been concerned that any payments insurers received from the risk-corridor litigation wouldn't trickle down to plan members.

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