Excellus BCBS Members Benefit from High Portion of Premiums Spent on Medical Care
Excellus BlueCross BlueShield exceeded federal and state standards by $330 million in the amount it spent on medical benefits on behalf of its membership in 2012.
To cap profits and administrative costs of health plans in order to maximize medical benefits to consumers, the federal Patient Protection and Affordable Care Act and state regulations set certain medical benefit spending levels for insurers. For the second consecutive year of the new rules and reporting, Excellus BlueCross BlueShield exceeded the standards.
“Our mission is to provide competitive, affordable access to quality health care,” said Christopher Booth, chief executive officer for the health plan. “What this means is that our members collectively got more hospital and physician services, prescriptions and other medical benefits throughout the year than what federal and state government standards require." Some health insurers that didn’t meet the standards will be required to pay refunds.
State and federal standards, as they apply to New York commercial insurance customers, set the minimum level of benefits to be 82 percent of premium revenues in the individual direct pay market along with small groups and 85 percent for large groups. Excellus BCBS reports that it spent 94.9 percent of premium revenues on medical benefits for its individual direct pay membership, 92.5 percent for small groups and 92.1 percent for large groups.
Out of $4.1 billion in premium revenues collected, the health plan paid out $3.8 billion in medical benefits for its customers, about $330 million more than federal and state mandates require.
Last year, federal officials reported that hundreds of millions of dollars in refunds were paid by other health plans throughout the country, even in states where the minimum standards are lower than those in New York.