PINEHURST – The Affordable Care Act (also known as “Obamacare”) requires health insurers to spend a certain portion of the premium money they collect on actual health care costs as well as on activities intended to improve health care quality. FirstCarolinaCare Insurance Company (FCC), FirstHealth of the Carolinas’ health insurance company, not only meets but exceeds the law’s requirements.
Under the federally mandated health care legislation, a given percentage of an insurer’s premium revenue must be spent on medical care instead of going toward profit or administrative expenses. For small employer plans (covering 50 or fewer employees), medical spending can’t be less than 80 percent. During calendar year 2011, FCC spent 86.7 percent for small group medical costs. For large employer plans (covering more than 50 employees), the required percentage is 85 percent. FirstCarolinaCare spent 93.1 percent in 2011.
“Since FirstHealth’s core purpose is ‘to care for people,’ FirstCarolinaCare is an insurer with a unique focus,” says FCC President Ken Lewis. “It’s our mission not only to cover health care costs but also to provide the wellness programs and chronic care management programs that ensure quality care. As a FirstHealth affiliate, we know the communities we serve. As a not-for-profit company that is affiliated with a health care system, we are committed to investing in the health and wellness of the residents of those communities – not because we have to, but because it’s the right thing to do.”
The percentage of premium revenue an insurer spends on care and improving quality is called “Medical Loss Ratio” or MLR or the 80/20 rule. Insurers who do not meet the spending requirement must return the excess money to subscribers in the form of a rebate.
FirstCarolinaCare issued a rebate for 2005, the only year the company has exceeded its self-imposed profit cap of 1.5 percent and five years before the adoption of the Affordable Care Act.
In addition to the money FCC uses to cover subscribers’ medical costs, the insurer is known for its progressive wellness and chronic disease management programs. The goal, according to Lewis, is to provide the best possible health care coverage along with personalized wellness programs.
“We consider ourselves custodians of our customers’ money,” he says. “As custodians, we believe it’s our responsibility to use that money as little as possible on administrative costs and profits and more on health care needs.”
A wholly owned subsidiary of FirstHealth of the Carolinas, FirstCarolinaCare is headquartered in Pinehurst and serves about 17,000 members in a service area representing a majority of North Carolina counties with a range of small- and large-group health benefit plans.
For more information on FirstCarolinaCare Insurance Company, visit www.firstcarolinacare.com.