Rising prices, fewer choices: Premiums increase as insurance companies prepare for new customers
By Brandi Jewett
Forum News Service
Blue Cross Blue Shield and Medica are reducing their offerings of insurance plans, but raising premiums to cover costs associated with changes established by the Affordable Care Act, often referred to as Obamacare.
“Changes in premiums for health insurance will vary, depending on a person’s situation,” Blue Cross spokeswoman Andrea Dinneen said in a statement. “Some people might see a decrease in total premiums, however, others will see an increase. In general, an increase in premium will also mean a greater level of coverage.”
Changes brought by the Affordable Care Act include a state benchmark plan with minimal coverage requirements and a mandate that no one in the United States can be turned down for health insurance.
In North Dakota, the number of people without health insurance is estimated to be 68,000, according to the U.S. Census Bureau. All of them are guaranteed coverage.
The adjustments to plans and benefits are part of the two companies’ efforts to meet that state benchmark, which was chosen by the state Department of Insurance and is sold by competitor Sanford Health.
“That plan does not offer as many benefits as most BCBSND plans,” Dinneen said. “But in order to remain as affordable as other metallic plans offered on the health insurance marketplace, BCBSND adopted the same level of benefits as the benchmark plan for those products.”
The term “metallic” refers to the bronze, silver and gold plan standards set by the Affordable Care Act.
It seems many of the plan adjustments result in higher prices and fewer plan options to choose from for customers.
The comparisons aren’t apples-to-apples because the 2014 numbers account for the inclusion of those once ineligible for health insurance — people with pre-existing conditions that could range from genetic diseases to cancer.
The estimated cost of the least expensive insurance plan under Medica this year for a nonsmoking 30-year-old man or woman buying individual coverage in Grand Forks was $70 per month.
Next year, with all those newly covered people factored in, the lowest possible price that same individual could pay is $218.
Blue Cross’ least expensive plan jumps from $47 per month to $179.
The Grand Forks Herald requested similar insurance plan price quotes for 2013 and 2014 from Sanford Health, but the request was not immediately met.
This year, a family of four searching for the lowest monthly health insurance price in 2013 could have selected an estimated $307-per-month plan from Medica or a $569 plan from Blue Cross Blue Shield. Next year, the lowest estimated price they could pay to those companies is $666 and $555 respectively.
Federal subsidies that could pay for part of a family’s or individual’s insurance costs are available for those who qualify.
For the most part, plan prices are increasing but the number of options customers have to choose from is shrinking.
In 2013, the number of plans available to that 30-year-old nonsmoking man or woman was 31 under Blue Cross. Starting Jan. 1, that number drops to 15 plans.
It’s a similar story at Medica, where options available for a similar individual shrink from 31 to four next year.
In addition to price changes, adjustments to coverage for some customers mean the reduction, omission or addition of several types of services.
Coverage must now include services called “essential health benefits” established by health care reform laws. The list of 10 services includes outpatient care, inpatient care, emergency care, mental health services, laboratory services and pediatric care. Blue Cross Blue Shield announced in its October Health News publication that it is decreasing benefits for several types of services.
Some services, such as infertility services, several types of mental health treatments and weight loss medication have been chopped while others such as home nursing care now have limits. In the case of home health care visits, those will be limited to 40 per year, or less than once a week.
Dinneen said the company is concerned about the “implications of the benchmark plan chosen for members who have been accustomed to more covered services in their health insurance.”
While cuts are taking place, companies are also adding benefits to plans.
One addition Medica is making to its plans is increased prescription drug coverage, which was not covered beyond a certain tier prior to 2014. After Jan. 1, all prescriptions are covered 100 percent after the deductible is paid.
Prenatal and maternity care, once not included in plans, also is now incorporated in Medica’s metallic plans.
Root of increases
The price increases of the insurance plan come with a few explanations.
Medica points to costs created by the thousands of people in North Dakota who are now eligible for health insurance under the Affordable Care Act.
Under the act, no one can be turned away, even if they have a pre-existing medical condition. Prior to Oct. 1, insurance companies could turn away potential customers who had these conditions.
“Each health insurance company will spread those costs across all of its enrollees,” Medica said in a statement on its website.
The company stated adjusting plans to meet requirements of the reform law and the health status of customers also could affect next year’s premium prices.
Dinneen didn’t provide details about the why Blue Cross plan costs would increase. She did say the company “is committed to continue to work with providers to be able to provide the right care, at the right time and at the right cost for our members.”
Of those without health insurance in the state, 20 have purchased insurance through the health insurance marketplace launched Oct. 1 as of last week.
The remaining members of that group have until March 31 to sign up for health insurance or risk incurring penalties. Those penalties are 1 percent of taxable income or $95 per adult and $47.50 per child — whichever is greater.
A maximum of $285 has been set per family, a seemly small price compared to $6,700 to $8,000 a year for a health insurance plan. But the penalty amounts grow as years pass, with the maximum penalty increasing to $975 per family in 2015 and $2,085 per family in 2016.
So far, North Dakota’s state government has had almost no involvement with the health insurance exchange following the approval of its benchmark plan.
The Sanford Health plan was recommended by the state Insurance Department and the state Legislative Health Care Reform Review Committee after they reviewed an independent analysis completed on benchmark choices and public comments.
The state’s three main health insurance providers, Blue Cross, Sanford and Medica, all submitted plans for consideration.
The selected plan from Sanford was sent to and approved by the U.S. Department of Health and Human Services.
North Dakota is one of 19 states that opted to let the federal government run the show when it comes to a health insurance exchange. The remaining states, such as Minnesota, have state-run exchanges or operate their exchanges through a state-federal partnership.
Though state Insurance Commissioner Adam Hamm declined to be interviewed, he said in an email response that 2014 insurance policies in the state wouldn’t be different under a state exchange.
A bill that would have created a state-run exchange in North Dakota was defeated in the state Legislature in a 2011 special session by a vote of 64-30 in the House.
Dalrymple told Forum News Service last week that the state’s decision to have the federal government run the exchange was “one of the best decisions we’ve ever made in state history.”
The federal exchange can be accessed at www.healthcare.gov.