The main insurance provider to many North Dakotans and especially here in Cavalier County is Blue Cross Blue Shield of North Dakota (BCBSND).
Posted on 11/14/15
By Melissa Anderson
Last week, many opened their mail and received quite a shock when they saw how much their health insurance premiums increased to and what their new deductible would be.
Many took to social media to lambast the increases and called their insurance agent to see what could be done. While local agents did their best to explain, it was Andrea Dinneen, BCBSND spokesperson, who was best able to explain the notice of premium increases members received.
“BCBSND understands member concerns, and we want members to know that we continually work to find ways to make health care costs and premiums more affordable for our members,” Dinneen said.
Dinneen explained that when BCBSND raises premiums, they are raised in order to pay for the health care services that members are most likely to use in the coming period. This is based on what members have used in recent periods.
Members can expect the following changes in premiums in 2016. Those with individual plans, on average, will receive a 12.5 percent increase. This increase accounts for the health care services that we predict members in this block of business will use in 2016 based on what was used in recent periods.
Those members whose plans are through an employer will experience different increases. These increases vary greatly depending on the employer group plan make-up and size. Small group plans purchased through the Federally Facilitated Marketplace can expect, on average, a zero percent increase.
“Premiums increase when the average cost of our member’s health care claims go up,” Dinneen said.
The cost of claims reflect two things– the cost of care, like the cost of an x-ray or doctor’s office visit and the number of times members use these services throughout the year.
Another factor impacting BCBSND premiums in 2016 is a reduction in funds from the federal government through the ACA’s reinsurance program.
“Those reductions in funds from the federal government amount to approximately five percent of the premium increases for individual plans,” Dinneen stated.
Members may also experience an increase due to an age bump. When a member enters a higher age bracket, the premium includes an additional increase, which attempts to offset the increase in claims and cost of services that often come with aging.
When it comes to insurance, premiums are not the only cost factor that members or those seeking health insurance need to consider. It’s very important for individuals and families to understand the out-of-pocket expenses associated with a health insurance plan.
Examples of out-of-pocket payments include co-pays, deductibles and coinsurance. In addition, some health insurance plans offer lower monthly premiums, but feature significantly higher out-of-pocket costs that members are responsible for when they seek medical care.
BCBSND works very hard to make costs as low as possible for their members according to Dinneen. In 2014, 87.2 percent of member premiums, or roughly 87 cents out of each premium dollar collected, was used to pay for medical care and services used by members.
“As a not-for-profit organization, the rest went to pay for the cost of running the business, such as processing claims, paying taxes and regulatory fees and maintaining appropriate financial reserves,” Dinneen said.
In addition to keeping administrative costs as low as possible, BCBSND works with health care providers and employer groups across the state to improve the health of our members to help reduce costs. BCBSND partners with several providers through MediQHome, a program that provides comprehensive care for patients to improve diagnosis problems faster and manage conditions through a collaborative approach.
“We also work with employer groups to promote work site wellness programs and other wellness incentives,” Dinneen stated.
All premium increases are approved by the North Dakota Insurance Department (NDID), the governing body that oversees health insurance companies in the state, before being passed on to members of BCBSND.
“Again, BCBSND understands member concerns and we want members to know that we continually work to find ways to make health care costs and premiums more affordable for our members,” Dinneen said.
Members are encouraged to call Member Services at 1-800-280-BLUE(2583) to better understand the options available to them. Members may also qualify for tax credits through the Health Insurance Marketplace, which help to cover the cost of premiums for plans purchased through www.Healthcare.gov.
While some may toss around the idea of dropping health insurance all together and simply paying the fine, Annette Raveneau, the regional communications director for the health care advocacy campaign, Get Covered America, would advise against that.
“For the 2016 taxes, if you don’t have health insurance throughout the year, you would be penalized $695 per person or 2.5 percent of your income, whichever is greater,” Raveneau said in an interview.
What Raveneau alludes to in her statement is that the fee for not having health insurance has significantly increased from last year’s to deter this practice.
The fines for not having health insurance are calculated in two ways. One is a number based on number and age of people in a family and the other is based on income.
In 2015, the fine for not having health insurance was 2 percent of the household income with the maximum a household would pay being the total yearly premium for the national average price of the bronze plan sold through the Marketplace or $325 per adult and $162.50 per child under the age of 18 with the maximum amount of $975 being fined. Whichever of these penalties was highest was what the household would have had to pay.
The penalty for those without health insurance on the 2016 taxes is significant. The penalty based on percentage of income is 2.5 percent of the household income with the maximum amount that can be fined being the same as the total yearly premium for the national average price of a bronze level health plan sold through the Marketplace.
The per person fine is $695 per adult and $347.50 per child under the age of 18 with the maximum penalty being $2,085. Again, the penalty that would be designated is whichever of these is highest.
The most popular individual health insurance providers in the state of North Dakota besides BCBSND is Sanford Health Plan and Medica Insurance Company.
Both of these companies are relatively new to the health insurance market of North Dakota. Sanford Health Plan is based in South Dakota and the closest agents to Cavalier County are in Devils Lake, Grafton, Grand Forks, and Fargo. Medica is a Minnesota based provider with agents as close as Grand Forks, West Fargo, and Adams, MN. Both providers do offer ways to compare health plans online at their respective websites.
For those who are considering switching health insurance, now is the time as open enrollment is currently underway. December 15, 2015 is the final day that a person can get a new health plan and have it take effect on January 1 of 2016.