Blue Shield of California (BSC) will no longer be allowed to offer coverage for California’s high-risk pool on Jan.

1. The board that oversees the Major Risk Medical Insurance Program (MRMIP) found that California Blue Shield’s rates for the program were too high compared with those offered by its peers, such as Anthem of California and Aetna Inc. The Managed-Risk Medical Insurance Board (MRMIB), which oversees MRMIP, said the plan’s number of enrollees in MRMIP fell to 78 this year. Last year, the board expressed concerns that BSC’s rates were higher than those of its competitors.

At the heart of the issue is how Blue Shield of California has calculated its rates for the MRMIP pool as well as its guaranteed-issue (GI) products offered under California law SB 265. The law was passed in 2000 to comply with HIPAA regulations. It requires California health plans to make their two most popular individual products available to residents who exhausted COBRA coverage and are entitled to HIPAA-GI coverage.

According to BSC spokesperson Aron Ezra, “The law describes the maximum rates that Knox-Keene [law] plans and insurers can charge HIPAA-GI individuals based in part on the average premium paid by MRMIP enrollees.” He says, “We have always set rates in compliance with state laws and regulations.”

Ezra says, “This year we reduced our rates at the request of the MRMIB board, but they chose not to renew our contract. As a result, we will work to ensure that our 78 MRMIP members have a smooth transition to another health plan at the end of the year.”

BSC couldn’t provide a good value for MRMIP subscribers, so the board was unable to renew its contract, Janette Lopez, chief deputy director of the high-risk pool, told The Los Angeles Times.

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