Unlocking the mystery of health insurance premiums

We understand that rising health care costs can create difficulties for you.

Expensive prescription drugs, increases in outpatient procedures, and high-cost hospital care are challenging patients, doctors, businesses, health plans, and the entire health care system. These increases in cost and demand for care are causing higher premiums and higher out-of-pocket costs nationwide.

At Excellus BlueCross BlueShield, it's our mission to help our members live healthier and more secure lives through access to high-quality health care that's as affordable as possible.

This mission guides everything we do and every decision we make. Thus, we want to help you better understand how health insurance premiums are calculated, and what we are doing to ensure rising costs don't get in the way of better health and access to care.

How are premiums calculated?

A health plan must consider four main factors - cost, utilization, intensity, and administration* - when calculating health care premiums:

• Cost reflects the fees that health insurers pay to hospitals, physicians, pharmacies, and other health care providers. Cost also includes the increasing prices of prescription drugs and durable medical equipment.
• Utilization is the number of medical services and prescription drugs that people use. Increased utilization means more claims and costs for health plans.
• Intensity is when a treatment or procedure is replaced by one that's more expensive. New treatments and new drugs typically cost more.
• Administrative costs are the normal expenses needed to run a health insurance business, including the costs associated with processing claims, providing customer service, providing clinical staff to work with members and their providers on their care, enrollment and billing, and government taxes/fees.

* Main items considered for fully insured plans.

How is your premium dollar spent?

What you pay for health insurance largely reflects how much we pay for your care.

In 2024, Excellus BCBS spent 92 cents of every premium dollar collected to pay for services and care for its members - including doctor visits, hospital care and medicine. The rest was spent on taxes, fees, and administrative costs.

Cost should not compromise outcomes

We have created a variety of innovative programs that focus on the care of our members, as well as the management of rising costs.

• Pharmacy Programs: Our pharmacy programs focus on prescription drug safety, including helping members take medications as prescribed, while also managing rising costs. Led by our expert pharmacists, these programs include Pharmacy Concierge, Specialty Drug Benefit Optimization and Site of Care.

• Preventive Care Programs: Preventive care programs include routine checkups, screenings, and immunizations. We offer resources such as our online Pharmacy Price Check and Find a Doctor tools, care management support, and free 24/7 nurse call line. Also, we have the Wellframe® app, which gives instant access to a dedicated care manager, dietitians, nurses, and other health care professionals.

• Programs for Chronic/Complex Conditions: Through a care management team, we ensure all members, but especially those with chronic or complex conditions, or those managing multiple health concerns at once, are supported through customized outreach, education, and assistance with interpreting their benefit package and claims history to identify potential solutions or ways to improve care while managing costs.

• Medical Director Team: Our medical director team is made up of physicians who are board-certified in their respective fields. Each physician has many years of clinical experience in upstate New York and is proud to live and work in the community that they serve. We are committed to working in partnership with you and your providers to deliver high-quality, evidence-based, and cost-effective health care.

To learn more about these and the many other programs offered through Excellus BlueCross BlueShield, contact us by calling the number on the back of your member card or visit us online.

Contact:Michelle Kraft [email protected]