Pinnocchio didn’t lie as much.

About 367,000 Texans will lose their individual health insurance policies next year when Blue Cross Blue Shield of Texas stops offering its Blue Choice preferred provider organization plans.

The insurer said it would still offer a health maintenance organization plan in every county in the state. Fewer doctors and hospital systems are willing to accept HMO patients.

PPO plans generally allow customers a wide choice of physicians and hospitals. An HMO uses a narrower network, managed by the insurer, of health care providers who are willing to work for lower rates.

The Richardson-based insurer started notifying customers and agents of the change this week, noting that it paid out $400 million more in claims last year than it collected in premiums.

“We felt like losing $400 million is not sustainable,” said Dr. Dan McCoy, the company’s chief medical officer.

He said the change would not affect PPO coverage in group markets offered through employers.

Last year, commercial in>surers dealt with millions of new customers receiving subsidies under the Affordable Care Act. Many insurers were off in their calculations of how much care those customers would receive, and insurers in several states have notified regulators of significant premium hike requests for 2016.

“Insurers as a group found this was a population more expensive than anticipated,” McCoy said.

He also faulted the high cost of medical care.

“Clearly, we’re concerned about the escalation in health care costs. I’m concerned every day about the rising cost of health care,” McCoy said.

In June, Blue Cross Blue Shield of Texas said it would seek a 19.97 percent premium hike for next year’s plans. Blue Cross Blue Shield of New Mexico, a sister of the Texas company, asked for a 51.6 percent premium hike in May. Both companies are owned by Health Care Services Corp. of Chicago.

Blue Cross Blue Shield of Texas raised premiums more than 9 percent in 2015.

Instead of a big rate hike in 2016, the company decided to drop its PPO plan on the individual market. Premium hikes to cover the higher-than-anticipated costs would have been spread across all its individual plans offered on HealthCare.gov, the federal exchange.

“This would have raised the rates so much for all our other plans that most people wouldn’t be able to afford them,” the insurer said in a notice sent to customers Thursday.

McCoy said the company could not comment until October about 2016 premiums for the HMO plan or any others that will be offered in the individual market.

About 148,000 individuals who started PPO plans before March 2010 will still have that option in 2016, the company said.

Original post: About 367,000 Texans will lose their individual health insurance policies next year when BlueCross BlueShield of Texas stops offering its Blue Choice PPO (preferred provider organization) plans.

The Richardson-based insurer started notifying customers and agents of the change this week, noting that it paid out $400 million more in claims last year than it collected in premiums.

“Losses that high are unsustainable, and we have adjusted our offerings – as many insurers have – to be sustainable in the new market reality,” the company said in a letter to insurance agents.

The insurer said it would still offer an HMO (health maintenance organization) plan in every county in the state via the Affordable Care Act’s Healthcare.gov website. Fewer doctors are willing to accept HMO patients.

The change does not affect BlueCross Blue Shield of Texas PPO plans offered by employers. And about 148,000 individuals who started PPO plans before March 2010 will still have that option in 2016, the company said.

via BlueCross BlueShield of Texas to drop individual PPO plans in 2016.

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