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Protecting your financial security

BCBSNC doesn't take chances with your financial protection. Our increased membership—we've added a million members since 2000, and last year served more than 3.3 million members statewide—is a big responsibility that we take very seriously. One in three North Carolinians now depends on BCBSNC to handle their health insurance needs. Because we know so many people are depending on us, we don't take chances with our members' security.

To be sure we'll be there for our members in good times and bad, we maintain reserves that guard against unexpectedly high claims or a public health emergency.

Facts you need to know about reserves

For more than 60 years, North Carolina law has set a clear and prudent standard for determining appropriate reserve levels for health plans. The law requires that we keep funds in reserve equal to between three and six months of our financial responsibilities. We are in full compliance with that statute—a law that has stood the test of time and that protects consumers by establishing reasonable reserve levels.

Reserve levels are appropriate

While the raw dollar amount of our reserves has increased over time, the number of months in reserves our company holds is currently below our 20-year average. That's because even as the dollar amount of our reserves goes up, so does the cost of the services those reserves exist to pay for.

At the end of 2005, our reserves equaled 3.8 months of claims and expenses. That was virtually unchanged from 2004, and below our 25-year average of 4.0 months. Are our reserves appropriate? Consider this: at our current reserve levels, if 8 percent of our insured membership had a $9,400 claim in addition to our normal claims volume, our reserves would be wiped out. A $9,400 claim is the average cost of a three-day, nonmaternity hospital stay.

That's why we take a cautious approach to managing BCBSNC's reserves. It's important that we balance affordability with the financial security our members depend on BCBSNC to provide. Our number one priority is to be there financially when you need us the most.