Blue Cross and Blue Shield is seeking a 6.35 percent rate hike for individuals who buy its Blue Advantage health plan.
If approved by the N.C. Department of Insurance, the higher rates would start Jan. 1. Last year, Blue Cross asked for a 6.97 percent increase but agreed to a 5.37 percent hike as part of a settlement with the DOI.
Rates would remain the same for Blue Options HSA and Blue Saver plans, which are high-deductible plans with lower premiums but fewer benefits. Those plans have about 80,000 members.
Blue Advantage is a traditional co-pay plan with about 265,000 members.
As the state's largest health insurer, Blue Cross dominates the market for individual coverage. Its clout also helps determine rates that other insurers in North Carolina are able to set.
Blue Cross has more than 3.7 million members, including many enrolled in so-called group plans paid for by employers. The company hasn't filed 2012 rate requests for its group plans, but has been raising those rates about 11 percent to 12 percent in recent quarters.
The higher rates requested for individual coverage come as Blue Cross and other insurers across the country are seeing a decline in demand for medical care, a trend that's boosting profit and keeping a lid on premium increases.
More costs are being shifted to consumers, increasing pressure to reduce utilization. "When consumers have a financial stake in their health care spending, we see less usage," said Blue Cross chief actuary Patrick Getzen.
The economic downturn also is forcing many households to cut expenses and put off some treatments.
“The rate of growth in usage has slowed due to the economy, but the cost of services continues to rise," Blue Cross chief financial officer Gerald Petkau said in a prepared statement. "When customers return to more typical utilization patterns, we’ll see health care costs increase more rapidly once again. That’s a major concern.”
Blue Cross reported net income of $167.7 million during 2010, up about 56 percent from 2009. But membership growth has been flat and the Chapel Hill company is pushing to slash its annual operating expenses by about $200 million by 2014.
The nonprofit health insurer is cutting costs as the medical industry adapts to changes triggered by the federal health overhaul Congress passed last year.
The company's profit margin in 2010 was 3.2 percent. That was up from 2.1 percent in 2009 less than its goal of 3.5 percent to 4.5 percent.
As part of its settlement last year with the state Insurance Department, Blue Cross agreed to refund $155.9 million to about 215,000 individual policyholders. The agreement also led to the rate increase that was slightly less than what Blue Cross has initially requested.
Department of Insurance spokeswoman Kerry Hall declined to comment on the latest Blue Cross rate request.
The DOI "scrutinizes and gives careful consideration to all rate filings to make sure that changes are justified before any rate changes are approved," she said.