New Products and better prices in 2006

By Andrew Ferdinand, Executive Vice President of Marketing at Grotenhuis

This fall, Blue Cross Blue Shield of Michigan will introduce a new consumer directed group product menu for 2006 with many innovations for small businesses.

The new product line up should meet the demands of a changing market while making small group health care coverage more affordable. These new programs focus on increasing health care choices with your employees to help them become smarter consumers. Everyone benefits as a result! 

Health Savings Accounts

The new Health Savings Account (H S A) compatible products will be called “Flexible Blue.” It will include an option for seamless administration for Health Savings Accounts for each employee of your group.

BCBSM Flexible Blue products will be available to the small group market for January 2006 effective dates. These plans will offer a choice of three HSA compatible deductibles (including prescription drugs) with three percentage copay options and two out-of-pocket benefit maximums. There are many flexible benefit design options.

A competitively priced H S A option for “Sole Proprietors” has also been added to the new 2006 product line up. Ask your independent insurance agent about Flexible Blue product options available through your local chamber’s member benefit program.

Why rate increases are dipping

The Blues also have good news about small group rates. As we’ve seen throughout 2005, BCBSM average rate increases for the small group market has been in the single digits. Fourth quarter 2005 statewide average rate increases are about 4 percent (plus or minus rate factors for a group’s average age and industry (SIC) rating).

Although medical inflationary trends are running much higher than this, BCBSM sets its rates based on Public Act 350. The formula dictates how much reserve funds they must maintain for financial stability (being the carrier of last resort in Michigan). And if the Blues’ reserves go too far above that amount, they must refund the excess back to its members in the form of rate relief.

This is why the average rate increase for fourth quarter is lower statewide then we’ve seen in many years. Even though group specific age and industry classifications do affect these rates, all groups are seeing much lower rate increases than in the past five years.  Groups who left Blue Cross Blue Shield of Michigan for other carriers in the past few years are taking another look at coming back because of the more competitive rates.

Call your agent

With more competitive pricing and all the new BCBSM consumer directed products, there’s never been a better time to review your group health care coverage with your independent insurance agent. Your agent can also tell you how your chamber membership provides you access to a wider range of group benefits normally only available to larger companies. For an agent referral contact your local chamber.