Bryn Nelson in the October issue of The Hospitalist (see “A Taxing Future for HM?,” p. 16) incorrectly states that Blue Cross Blue Shield of North Carolina’s refund to customers was a result of an overcharge. In point of fact, the refund is a result of a one-time opportunity due to the changes brought about by the health reform law. The new rating and grandfathering rules in the Patient Protection and Affordable Care Act create a one-time circumstance enabling these refunds.
The funds come from active life reserves, which are portions of the premium set aside in the early years of a policy to pay future claims and keep rates stable as customers’ medical expenses rise during the life of the policy. However, policies purchased or substantially modified after March 23, 2010, will end in 2014 under the new healthcare reform law, which is when the new products under health reform will be introduced. Therefore, the reserves held for these products will cover a much shorter period of time, allowing for these funds to be released.
Blue Cross Blue Shield of North Carolina