Blues increase insurance premiums
More than 30,000 customers affectedFARGO – Blue Cross Blue Shield of North Dakota announced Thursday it will increase premiums for more than 30,000 members effective May 1.
By: Patrick Springer, INFORUM
FARGO – Blue Cross Blue Shield of North Dakota announced Thursday it will increase premiums for more than 30,000 members effective May 1.
The annual rate increases, ranging from 2.4 percent to 16.9 percent, depend upon when the member purchased coverage and whether that was before or after a health-reform provision took effect.
The average customer covered under the North Dakota Blues’ most popular plan would see monthly premiums increase from $275 to $314, or $39, according to company figures.
The increases, approved by state insurance regulators, apply to individuals and do not include employer groups.
Most of the increases will apply to about 30,000 members who will see a premium increase of 14 percent.
That increase is less than the 23.7 percent Blue Cross Blue Shield said in filing documents it would need to cover costs for those members and the 16.7 percent increase it said in a related letter that it would accept.
About 2,000 individual policyholders will see rates increase by 16.9 percent, compared to the 29.8 percent needed by the Blues to break even and 22.6 percent the insurer initially indicated it would accept.
Finally, another 750 or so members, who bought their policies last fall, will see a 2.4 percent increase, compared to the 8 percent break-even level, which the Blues initially sought.
Costs to cover the individual members have exceeded premiums, and the loss totaled $20.6 million over the past 29 months, with $12 million of those losses in the past 12 months.
“The cost of insurance reflects the cost of claims, and we process those claims more efficiently than most other insurance companies,” Paul von Ebers, the Blues’ president and CEO said in a statement.
“The reality is that all our members are using more costly medical services more often, so the cost for premiums is going up,” he added. “We know our current system, with this rate of medical inflation, is simply unsustainable.”
The annual medical inflation rate over the past decade has averaged 8 percent for the insurer. In partnership with major provider groups, the North Dakota Blues are trying to reduce that average to 6.5 percent in three years.
More recently, the overall rate of medical inflation is 7 percent. That compares to inflation rates of 10 percent to 12 percent for other states, said Adam Hamm, the North Dakota insurance commissioner.
Still, he added, for consumers seeing their insurance premiums rise by 15 percent, “that’s not a lot of solace.”
Denise Kolpack, a Blue Cross Blue Shield spokeswoman, said the rates needed to break even are greater than those approved. The company is phasing in the increases over three years to soften the increase to consumers, she said.
Readers can reach Forum reporter Patrick Springer at (701) 241-5522
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