New Mexico: What the heck is going on with Blue Cross Blue Shield??

Last week I reported that insurance companies offering individual healthcare policies in New Mexico were asking for some pretty ugly rate hikes (on a percentage basis, anyway), mainly due to Blue Cross Blue Shield of NM (aka "Health Care Services Corp.") putting in for a jaw-dropping 57% hike. This resulted in 30% overall requested increases when weighted by market share.

Then, a few days later, the New Mexico state insurance commissioner announced the approved rate hikes for all 5 (or is it 6? see below...) of the companies in question. For BCBSNM (aka HCSC), they lopped the 57% hike down massively:

  • BCBSNM (aka Health Care Services Corp): 20% (vs. over 50% requested)
  • Presbyterian Health Plan: 3-6% depending on the plan (vs. unknown request)
  • New Mexico Health Connections: 4-17% depending on the plan (vs. 14.7% avg. request)
  • Christus Health Plan: 0% (0% requested)
  • Molina Healthcare of NM: -2% (yes, a 2% decrease) (vs. 2.5% avg. request)
  • Celtic Insurance Co: ??? (not mentioned in the article) (vs. unknown avg. request)

While this is ostensibly good news, as it reduced the overall weighted approved increases to just 12% or so, BCBS decided to take their ball and go home instead:

Blue Cross Blue Shield of New Mexico President Kurt Shipley strongly disagreed with Franchini’s comments, saying his organization provided more detailed information than it had for previous rate requests. He said it even submitted an additional proposal that included insurance offerings that would be comparable to rates Franchini had approved for the other insurance companies.

...Blue Cross now has 30 days to request a hearing on Franchini’s decision. [BCBSNM President Kurt] Shipley said he hasn’t decided whether to do so, but told Franchini he remains open to further discussions.

“I remain optimistic that we can still get something in place,” Shipley said.

If no agreement is reached, Shipley said Blue Cross likely would not offer any plans through the health exchange for 2016. Open enrollment begins on Nov. 1.

Franchini said New Mexico has a competitive insurance market, and Blue Cross customers could shop around if that were to happen.

HOWEVER, that's not the end of the story. Politico, today:

LIES, DAMNED LIES, AND STATISTICS IN NEW MEXICO — Facts are maddeningly difficult to pin down in the standoff between Blue Cross Blue Shield of New Mexico and the state’s insurance regulator over 2016 premiums. On Friday, the state's Superintendent of Insurance John Franchini rejected what he said were stratospheric proposed average rate hikes of 51.6 percent. But Health Care Service Corporation, which owns the New Mexico Blue, countered that its final offer would have meant rate hikes of just 11.3 percent. Superintendent Franchini’s response? “That is wrong. That is completely false. That’s a typical Health Care Service Corporation ploy.”

I should note here that I've seen both 57.6% and 51.6% figures tossed around for the original average request...the actual range is anywhere from 49% to 65%:

Blue Cross and Blue Shield of New Mexico (BCBSNM) is filing new rates to be effective January 1, 2016, for its Individual ACA metallic coverage. As measured in the Unified Rate Review Template (URRT), the range of rate increases by product is 49% to 65%.

Changes in allowable rating factors, such as age, geographical area, or tobacco use, may also impact the premium amount for the coverage.

Back to Politico...

— Franchini maintains that the insurer’s final offer would have still raised rates by nearly 40 percent — and that the company didn’t provide enough information for regulators to determine if those rates were actuarially sound. Franchini further indicates the state was willing to permit average rate hikes of 24 percent, but HCSC rejected that offer. He also points out that the insurer can seek a public hearing if it wants to contest the state’s decision. But he doesn’t anticipate that the company will take that route. Instead he expects the New Mexico Blue to exit the market. That means 35,000 individuals will need to choose new plans from the four remaining health plans on the exchange.

Side note: The official number of enrollees mentioned in BCBSNM's Rate Review listing is 33,187...but that was as of 2/28/15. Presumably the addtional 2,000 or so have been increased since then.

— HCSC's further response: "We welcome the opportunity to clarify our proposed rates with state officials and how we propose to compete in 2016 with an average rate increase of 11.3 percent. We believe that all New Mexicans, including our 35,000 current 'individual' customers, should have this option. Under the circumstances, and given the proposal we have already made, we believe that continued dialogue with the state is the best course of action at this time."

Ah. Well, that's clear as mud. Depending on your source, Blue Cross Blue Shield of New Mexico is asking for--or has been approved for--rate increases of 11.3%, 20-24%, 40% or 49 - 65%. Or they might just say "screw you guys, I'm going home" and drop off the exchange completely, which seems to be the most likely scenario at the moment...although it's important to remember that this would also mean no more off-exchange individual policy sales for BCBSNM as well (I think).

Oh, yeah, one other thing: None of the articles about this ongoing saga ever mention Celtic Insurance, even though they're one of the 6 companies listed on the official NM health insurance rate review website.

As Drudge would put it, "Developing..."