INCLUSIVE HEALTH –
Inclusive Health * 3739 National Drive, Ste. 228 * Raleigh, N.C. 27612 * 1-866-665-2117
CONFIDENTIAL
December 14, 2012
Dear Agents and Brokers:
Inclusive Health would like to update you on some very important information regarding Inclusive Health – State Option. As a result of a decrease in state insurance premium tax revenue, Inclusive Health did not receive a transfer from the State of this critical source of revenue this fall. In addition, premium tax revenue receipts continue to trail this fiscal year, so it is uncertain the risk pool will receive a transfer in fall 2013. Since the state premium tax funding is our largest single source of revenue, the impact on our fund balance is significant and, according to the latest actuarial projections, Inclusive Health will draw down its’ reserves by December 2013, increasing the possibility of a deficit by the end of our expected run-out period in June 2014.
NCGS 58-50-180(f) obligates the Board and the Executive Director to operate the risk pool so that the estimated costs during any calendar year are not anticipated to exceed total income from policy premiums and other risk pool revenue. The Inclusive Health Board met earlier this week to consider its options for addressing this situation. NCGS-58-50-180(f) also allows the Board to suspend enrollment for an indefinite period to ensure the pool’s solvency. In concert with implementing cost cutting steps, the Board resolved to consult with and educate the legislature about our financial situation, to see if they would be able to provide any favorable options that would allow the pool to remain open to new members. . Pending those discussions, and in the absence of other alternatives, the Board voted to take the following actions:
1. Freeze enrollment effective February 1, 2013 for any complete state pool applications received by January 15, 2013 for all but HIPAA and HCTC-eligible enrollees for whom we are required by federal law to remain open.
2. Also for the remaining HIPAA and HCTC-eligible enrollees effective after February 1, 2013, Inclusive Health will no longer pay the $150 – $200 referral fee to agents for referring an individual to the State Option.
3. Enrollment in the IH Assist program will be restricted to those currently receiving this premium subsidy assistance who re-qualifies in 2013.
Enrollment in Inclusive Health – Federal Option, which is federally subsidized, will remain open and agent fees will remain intact.
We appreciate all that you as a participating agent or broker have done to assist North Carolinians in signing up members for Inclusive Health. We are very grateful to you and the entire broker community. Please understand that these steps are being taken only after exhausting other possibilities for paying the costs of continued coverage for our existing state pool membership of almost 11,000 members.
By taking these actions now, the Board believes we can ensure the availability of funding to cover existing members through the run-out period in 2014. We will be closely monitoring the expected claims costs and reserve balances to continue to adjust our operating finances as necessary. If you should have additional questions about any of this information, please do not hesitate to contact the Inclusive Health Customer Service Center at (866) 665-2117.
Sincerely,
Michael Keough
Executive Director