Rates for 2016 won’t be finalized until October, but of the three carriers that participated in the exchange in 2015, two – Blue Cross Blue Shield of North Dakota and Medica Health Plans – have requested double digit rate increases for 2016. BCBS of ND has proposed an average rate increase of 18.4 percent for their 29,000 individual market policy-holders (including on and off exchange plans) BCBS of ND has 70 percent of the on-exchange market share in 2015.
Medica has proposed an average rate increase of 16.5 percent, for an estimated 4,778 members, including on and off-exchange.
Sanford’s proposed rate increases were less than 10 percent, as they do not appear on Healthcare.gov’s rate review tool.
Time Insurance Company (which offered off-exchange plans in 2015) also proposed significant rate hikes, but it was subsequently announced that the parent company – Assurant – is exiting the individual market and will not be offering plans for sale during the upcoming open enrollment period that begins November 1.
As of September 2015, the North Dakota Insurance Department reported that effectuated enrollment through the exchange was:
- BCBS of ND = 11,705 members
- Medica = 3,067 members
- Sanford = 1,894 members according to ND Ins. Dept (according to Sanford, the count is a little lower, at 1,772).
Those numbers are from September and the number of covered lives mentioned in the rate filing data is from several months ago, but we can roughly estimate that BCBS has an additional 17,279 off-exchange enrollees, while Medica has 1,711 off-exchange enrollees. Sanford’s rate increase filing’s aren’t public, as they’ve requested a rate increase under 10 percent. But their on-exchange market share is only 11 percent of the total exchange enrollees, so their proposed rate change won’t have a dramatic effect either way in terms of the overall weighed average.
Assuming the proposed rates are approved as-is, the worst-case scenario weighted average rate increase in the North Dakota exchange is 17 percent. That’s assuming a 9.9 percent rate increase for Sanford; the overall weighted average could be slightly lower if Sanford’s rate change ends up being significantly lower than 10 percent.
If we consider the off-exchange market too, the weighted average rate increase is slightly higher, given BCBS’s high number of off-exchange enrollees. I checked with Sanford to get their off-exchange enrollment count, which is 267 members as of September 2015. in that case, the worst-case scenario weighted average rate increase for the entire ACA-compliant individual market in North Dakota would be about 17.7 percent.
These numbers assume that regulators don’t change the rate filings before approving them, and they also don’t take into account enrollees’ ability to shop around during open enrollment and switch to a different plan. If your rate is going up for 2016, be sure to compare it with the other available options – don’t just let your plan auto-renew. In addition, if the benchmark (second-lowest-cost silver) plan in a given area has a higher premium in 2016 than in 2015, subsidies for all subsidy-eligible enrollees in the area will increase for 2016, to offset the higher overall premiums.
During the 2015 open enrollment period, 18,171 people completed their private plan enrollments in the North Dakota exchange, including 10,080 who renewed 2014 coverage (55 percent of the 2015 total were people who already had coverage in the exchange in 2014). HHS had predicted a total enrollment of 14,000 people by the end of the 2015 open enrollment, so the exchange ended up at almost 130 percent of their target.
86 percent of the residents who finalized their enrollments for 2015 were eligible for premium subsidies.
In addition to the private plan enrollments, 2,013 North Dakota residents enrolled in Medicaid or CHIP through Healthcare.gov between November 15 and February 22.
By June, HHS reported that North Dakota’s exchange had 16,651 effectuated (in-force, paid-up) private plan enrollments. Attrition is a normal part of the individual insurance market, and enrollment is generally expected to decline slowly throughout the “off season” outside of open enrollment. But according to the ND Insurance Department, effectuated enrollment climbed slightly from June to September, with 16,666 people covered under effectuated policies by mid-September 2015.
Open enrollment for 2015 has ended, and most enrollees must now have qualifying event in order to purchase 2015 coverage. But Native Americans can enroll year-round, as can applicants who qualify for Medicaid or CHIP. The next open enrollment period begins on November 1, for coverage effective January 1, 2016.
Subsidies safe in North Dakota
The Supreme Court issued a ruling in King v. Burwell on June 25, and the Justices upheld the legality of subsidies in every state, including those that use the federal marketplace (Healthcare.gov). That means subsidies are safe for 13,000 people in North Dakota, and will continue to be available during the upcoming open enrollment period that begins November 1. For people who currently receive subsidies, losing them would have boosted premiums by an average of 169 percent – making coverage unaffordable in many cases.
Even for people who don’t get subsidies, the outcome of a plaintiff win in King v. Burwell would have been grim: The American Academy of Actuaries estimates that premiums in the entire individual market in impacted states would increase by at least 35 percent, and possibly as high as 55 percent – in addition to the regular annual rate increases based on medical cost inflation.
Insurers in North Dakota expressed relief that subsidies were upheld, and the ruling is certainly good news for insureds and medical providers. Not surprisingly, however, North Dakota political leaders’ reaction to the ruling was generally split along party lines, with Republicans tending to express disappointment and continuing their call for full repeal of the ACA.
Rates and carriers for 2015
Open enrollment started on November 15, 2014, and continued until February 15 (February 22 with the extension that was added for people who had tried to enroll by the deadline). The North Dakota Insurance Department has a healthcare reform page on their website that includes useful information for consumers, including a list of all the North Dakota brokers and agents who are certified to assist people with exchange enrollments.
Three carriers offered policies in the federally-run North Dakota exchange for 2015. This is unchanged from 2014, and includes Blue Cross Blue Shield of North Dakota, Medica and Sanford. But while the three carriers offered a total of 21 plans in 2014, they offered a total of 30 options for 2015.
PricewaterhouseCooper LLC calculated weighted average rate changes from 2014 to 2015 across the entire individual market (on and off-exchange), and found an average price decrease of 3 percent in North Dakota. But if we look just at silver plans, people who had the cheapest silver plan in the ND exchange in 2014 will have an average rate increase of about 13 percent. If they’re willing to switch to the new cheapest silver plan however, their rate increase will be much more muted, averaging just 4 percent.
And a Commonwealth Fund analysis in December found an average rate increase of 7 percent (for a 40-year-old non-smoker) across all plans and metal levels in the North Dakota exchange.
North Dakota’s 2014 enrollments
As of April 19, 2014, 10,597 people had enrolled in private plans through the North Dakota exchange. This was the lowest total of any state in the country, but it was still more than double the number of North Dakota residents who had enrolled as of March 1.
By of July 6, there were 9,953 enrolled through the exchange in North Dakota. That’s more than the state reported in mid-May (8,374), but lower than the total at the end of open enrollment because not everyone who enrolled ended up paying their premiums and keeping their new policies.
Enrollment is expected to be lower in sparsely-populated North Dakota. Despite the low figures, the state decreased its uninsured rate by two percentage points – from 15 percent to 13 percent – during the first half of 2014.
North Dakota Medicaid expansion
In addition to private plan enrollments, by early June nearly 9,000 low-income North Dakota residents had enrolled in the state’s expanded Medicaid program. North Dakota has followed a unique public-private partnership model of Medicaid expansion, allowing private health insurance carriers to bid for the opportunity to provide health insurance coverage to the state’s newly-eligible Medicaid population using federal Medicaid funds. Sanford and Blue Cross Blue Shield of ND placed bids, and ultimately Sanford accepted the job.
Higher than average after-subsidy rates
A report released by HHS in June found that 84 percent of enrollees in the North Dakota exchange received premium subsidies, and the average after-subsidy premium is $132 per month. This is the second-highest average after-subsidy premium out of the 36 states where HHS is running the exchange (only New Jersey is higher, at $148 per month), and is considerably higher than the $82 per month average across all 36 states.
But the higher average net price in North Dakota is a function of enrollees’ incomes and the plans they selected, as the Obamacare premium tax credits do a very good job of evening out premiums across populations with similar household incomes. The average pre-subsidy premium in North Dakota is $350 per month, which is very close to the $346 average pre-subsidy premium across all 36 federally-facilitated marketplaces. Rates for 2015 had to be filed with the North Dakota Insurance Department by June 6, and are currently still under review.
Blue Cross Blue Shield of ND fired their CEO, Paul von Ebers, in May 2014 after the carrier reported a loss of nearly $73 million in 2013. Much of the loss stemmed from subsidiary Noridian Healthcare Solutions’ bungled development of the state-run exchange in Maryland. The carrier has kept administrative expenses quite low however (7.7% of premiums) and insureds will not see higher premiums based on the Noridian losses, as regulators only allow premiums to be increased based on claims data.
In December 2014, Tim Huckle, who took over as CEO, explained that BCBS of ND is in a much stronger position financially than they were a year ago. However, the carrier is undergoing corrective action under the guidance of the insurance commissioner after BCBSND was recently fined $60,000 by the state for a variety of violations. BCBSND provides coverage to more than half of the state’s population, and the insurance commissioner has noted that the carrier is working diligently to correct the problems that triggered the fine.
Health insurance carriers are conducting workshops and outreach sessions to help people learn about their options under the ACA. There are also 17 navigators in ND who are working to educate the public about the policies and subsidies available in the exchange. The state got about $1 million in federal funding to spend on ACA outreach in 2014.
Following President Obama’s announcement in November that existing policies could be renewed into 2014 at the discretion of states and carriers, North Dakota’s Insurance Commissioner Adam Hamm decided to go along with the president’s policy cancellation “fix” and urged carriers to provide an option to renew some 36,000 individual policies that had been scheduled to terminate at the end of the year. In May, he extended that allowance following the transitional relief extension issued by HHS in March.
But Blue Cross Blue Shield of North Dakota – the state’s largest insurer – opted in December 2014 not to renew policies that had been scheduled for termination. Their insureds had the option to switch to a new ACA compliant BCBS plan, or purchase new coverage from another carrier.
North Dakota exchange history
The North Dakota House of Representative voted against a state-run health insurance exchange in 2011, and Gov. Jack Dalrymple’s administration reiterated that position in November 2012. But North Dakota is expanding its Medicaid program under a provision of the Affordable Care Act. Dalrymple favors the expansion, and the state House approved the measure in February 2012. About 29,000 uninsured people will be eligible for Medicaid under the expanded guidelines, including childless adults.
North Dakota health insurance exchange links
State Exchange Profile: North Dakota
The Henry J. Kaiser Family Foundation overview of North Dakota’s progress toward creating a state health insurance exchange.
North Dakota Insurance Department
Assists people insured by private health plans, Medicaid, or other plans in resolving problems pertaining to their health coverage; assists uninsured residents with access to care.
(701) 328-2440 / Toll Free: 800-247-0560 / firstname.lastname@example.org