|October 21, 2003|
BlueCross BlueShield of Tennessee Announces $67 Million Premium Payback
CHATTANOOGA, Tenn. — BlueCross BlueShield of Tennessee today announced plans to distribute a projected $67 million of paid premiums for 2003 to fully insured groups and individual health care policyholders.
Analysis of the company’s current health care costs indicates a lower than predicted increase in annual medical claims costs. The resulting unused premiums have prompted BlueCross to give its customers a year-end premium payback.
The company plans to provide customers with a reimbursement for a percentage of premiums paid during the 2003 calendar year. Customers who were with BlueCross for as little as one month in 2003 will receive a portion of their premiums back, beginning in December. This applies to both those who enrolled or cancelled with the company during 2003.
Those affected by the payback include fully insured group customers, which consist of employer groups and organizations that pay premiums to BlueCross, and individual subscribers not part of a group account, including Medicare supplement policyholders.
Similar to a mutual company returning surplus funds to its customers, or a publicly traded company paying dividends to its shareholders, BlueCross is returning the surplus to its customers.
“We’ve asked our customers to work with us on addressing health care affordability,” said Vicky Gregg, president and CEO. “Their efforts have paid off. Wiser health care choices, more generic drug substitutions, and preventive medicine have led, in part, to a slower-than-normal increase in medical claims costs.”
Innovative plan designs, an internal drive to keep administrative costs low, and other BlueCross programs, such as pharmacy management initiatives, also played a key role in the savings.
BlueCross also noted that providers in its network have partnered in these efforts to make health care more affordable. A provider-driven Hepatitis C program, for example, has saved $2.1 million in unnecessary medical costs since mid-2001.
Likewise, an ongoing generic drug campaign helped stimulate a 3 percent increase in generic drug use among BlueCross customers in 2002, which resulted in a cost savings of $10 million. More programs of this type, as well as continued education for both patient and provider, are planned to help hold down future costs, noted Gregg.
“BlueCross sets premium rates based on previous claims experience and our best prediction of future health care costs,” Gregg said. “If current trends continue, then the rate of premium increase will slow. That is great news for all BlueCross BlueShield of Tennessee customers. We will continue to look at past utilization and present conditions in the health delivery system as we prepare for the future.”
All fully insured group accounts will receive premium paybacks in their choice of a check in December 2003 or credit on their statement for January 2004. Individual policyholders will receive premium payback checks in December 2003.
More details on the premium payback can be found on the BlueCross Web site at www.bcbst.com under the “Premium Payback” link or in the online News Center.
BlueCross BlueShield of Tennessee's mission is to provide its customers and communities with peace of mind through affordable solutions for health and healing, life and living. Founded in 1945, the Chattanooga-based company is focused on reinventing the health plan for its 3 million members in Tennessee and across the country. Through its integrated health management approach, BlueCross provides patient-centric products and services that drive health improvement and positively impact health care quality and value. BlueCross BlueShield of Tennessee Inc. is an independent licensee of the BlueCross BlueShield Association. For more information, visit the company's website at www.bcbst.com.
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