FARGO-North Dakota insurance officials outlined a plan intended to allow consumers more options for health coverage they said would reduce premiums between 10 percent and 20 percent and would give insurers greater flexibility.
Insurance Commissioner Jon Godfread presented the proposal, which aims to increase health insurance affordability and competition, Wednesday, Sept. 26, to an interim legislative committee.
The core of the proposal is to reinsure-the term for insurance for insurance companies-claims that are more than $100,000 up to $1 million by covering 75 percent of paid claims.
"We're hoping to provide some relief," Godfread said in an interview, adding that his intent is to provide some "stability and certainty" in the insurance market. "It's somewhat of a stopgap while we wait for further reform coming out of Congress."
The presentation, which will become proposed legislation, culminates a long period of study and coincides with the release of health insurance premium increases approved to take effect in 2019.
For individuals buying coverage outside the Affordable Care Act exchange, premium increases will range from 1.43 percent for customers of Blue Cross Blue Shield of North Dakota, 7.6 percent for the Sanford Health Plan and 23 percent for Medica.
For consumers who buy individual coverage through the marketplace, premium increases for 2019 will be 2.29 percent for Blue Cross Blue Shield customers, 21.5 percent for the Sanford Health Plan and 25.9 percent for Medica.
Premium increases for the small group market will be more modest, ranging from 2.48 percent for groups covered by Blue Cross Blue Shield, 4.8 percent for Medica and 5.7 percent for Sanford Health Plan.
"The 2019 rates further illustrate the need for a comprehensive overhaul of the health insurance market at the federal level," Godfread said. The proposal is intended to help small business owners, farmers, ranchers and anyone else who earns too much to qualify for subsidies under the Affordable Care Act-many who have been priced out of the market and are going without health insurance, he said.
At the meeting of the interim Health Care Reform Review Committee, insurers also spoke about the proposal presented by Godfread. Insurers generally support the proposal, but have questions about how they will be assessed to pay for the program. Federal funds also would help pay the cost.
North Dakota is relatively fortunate to have three major insurance carriers selling coverage on the marketplace exchange, Godfread said. United Healthcare has announced that it will enter the small group market next year.
In order to implement the plan, North Dakota would have to receive a waiver from the federal government. Assuming legislators approve the program next year, the soonest it could take effect would be the 2020 insurance plan year.
A consultant Godfread's department hired, NovaRest Actuarial Consulting, estimated that reinsurance that would be payable for 2020 would range between $26 million and $48 million. The actual amount will depend on submitted claims.
The plan, based on a similar program in Idaho, would not alter the essential benefits required under the Affordable Care Act and will result in an increase in the number of people whose coverage meets those essential benefits requirements, the consultant's report said.
Healthier individuals would pay a reduced premium. Attracting more healthy individuals would help stabilize premium rates, Godfread said.
North Dakota was one of only two states that did not allow insurers to add the cost of cost-sharing reductions, which the Trump administration failed to make available, to premiums. As a result, Medica left the exchange in North Dakota at the end of 2017, leaving Blue Cross Blue Shield of North Dakota and the Sanford Health Plan on the exchange for the individual market in 2018.
State insurance officials plan to submit proposed legislation for the reinsurance program in the next session, which begins in January.