ND health insurance market near monopolistic

FARGO – North Dakota ranks among the states with near-monopolistic health insurance markets, a study by the American Medical Association shows.

Concentration of health insurance among a handful of firms sets up conditions that lead to higher premium costs and less generous benefits, the study said.

In North Dakota, the private health insurance market has long been dominated by Blue Cross Blue Shield of North Dakota.

Blue Cross Blue Shield dominates the preferred provider segment of the market, in which customers select a health system and have to pay more out of pocket if they go outside that network for care.

The North Dakota Blues have 54 percent of the preferred provider segment, according to the American Medical Association study.

The Blues also have 81 percent of what’s called the point of service market, a hybrid between the preferred provider and more restrictive health maintenance organization, or HMO, which requires a doctor’s authorization for any treatments.

Figures kept by the North Dakota Insurance Department indicate Blue Cross Blue Shield has an even more dominant market position, with about 85 percent of premiums in the standard private health insurance market.

Even so, Blue Cross Blue Shield of North Dakota executives contend that a variety of comparative indicators show consumers aren’t being gouged.

“I would argue that having a dominant market share has not increased premiums,” said Judd Wagner, Blue Cross Blue Shield’s chief marketing officer.

He said the average 2011 employee contribution for single coverage in North Dakota provided through an employer was $987 in North Dakota, compared to a U.S. average of $1,090, according to figures from Kaiser Family Foundation.

Also, Wagner said, Blue Cross Blue Shield of North Dakota health plans typically are ranked in the top 10 to 25 percent in terms of benefit offerings. “The level of benefits is very high,” he said.

Adam Hamm, North Dakota’s insurance commissioner, said the latest study confirms a situation that has long been apparent, that a single health insurer dominates.

Last year, however, companies introduced six new major medical coverage plans in North Dakota, giving consumers more choices.

One question is whether health insurance exchanges, online marketplaces to help consumers comparison-shop for coverage, will help attract new insurers to the North Dakota market starting in 2014.

The exchanges will decrease marketing costs, and therefore might attract more interest from insurers not now serving North Dakota, Wagner said.

“I would say the barriers to entry in North Dakota are fairly low,” he said.

Although the Obama administration has touted the exchanges as a way to increase competition, Hamm said there is no way to predict what will happen.

“Like most things with Obamacare, we are still a couple of years away from finding out conclusively what, if any, promises the federal government has been able to keep concerning Obamacare,” Hamm said.

Anti-competitive conditions are present in 70 percent of the 385 metropolitan areas in the nation, the American Medical Association study found. In about 50 percent of those markets, at least one health insurer had a market share of 50 percent or greater.

Readers can reach Forum reporter Patrick Springer at (701) 241-5522

Tags: north dakota, news, health