Thousands in ND face health coverage changes
FARGO — More than 35,000 customers in North Dakota face discontinued health coverage because their plans are being scrapped due to new requirements under the Affordable Care Act. The three major health insurers in North Dakota were asked to report to state regulators their enrollment figures and cancellations resulting from the health reform act, commonly known as Obamacare.
The state’s largest health insurer, Blue Cross Blue Shield of North Dakota, covers about 31,600 members – 17,000 in small groups and 14,600 individuals – whose insurance plans are being discontinued.
That combined figure represents 8 percent of the North Dakota Blues’ 400,000 membership total.
Medica sent notices affecting 3,173 members that their policies are being discontinued and informing them of their options.
The Sanford Health Plan sent discontinuation notices to about 450 members, all individuals, whose insurance plans did not meet the new coverage qualifications, which begin to take effect Jan. 1.
That represents about 50 percent of the Sanford plan’s individual policyholders in North Dakota, said Ruth Krystopolski, president of the Sanford Health Plan.
The total number of North Dakota residents who must switch coverage is 35,585, according to the tally by the state Insurance Department.
“You have almost 36,000 North Dakotans who either are or will be losing their health insurance policies, and this is after they and all Americans have been told they will be able to keep their health insurance,” Insurance Commissioner Adam Hamm said Friday.
“The Obama administration has to find a way to remedy or fix that situation,” Hamm said, adding that his department has been hearing from consumers affected by the discontinuations.
Most health insurance plans that existed when the law was passed in 2010 are eligible under a “grandfather” status, and therefore do not have to meet all the requirements of the health care law, health insurers said.
But health insurance plans that made a major change and no longer comply with the Affordable Care Act, or plans purchased after March 23, 2010, are not eligible for the “grandfather clause” exemption.
The Sanford Health Plan did not begin selling policies in North Dakota until late 2010 or early 2011, so none of its coverage plans qualified for the “grandfather clause” exemption, Krystopolski said.
Also, certain requirements under the new law, such as limits on deductible, “out-of-pocket” payments, were not available to insurers until late last year, she said.
“We were working in the blind,” Krystopolski said, continuing to sell policies without knowing all of the new requirements.
“We sold what the market requested,” she added, noting that some customers preferred high-deductible plans with lower premiums.
Under the new requirements, deductibles for individuals or small groups are generally capped at $2,000, with an exception allowing caps of up to $5,000 for individuals and $3,000 for small groups.
Total out-of-pocket expenses now cannot exceed $6,350 for an individual or $12,700 for a family.
Nationally, estimates of the percentage of policies that will be discontinued under the new coverage requirements have ranged from 40 percent to 67 percent, Krystopolski said.
In most cases, plans failed to meet the new requirements because they did not cover maternity care or because the deductibles were too high, she said.
Because of the major changes, Blue Cross Blue Shield has been trying to educate its members for the past two years, including notifying groups and individuals whose insurance plans do not meet the new coverage requirements.
The North Dakota Blues has and will continue to send out notification letters to affected members at least 90 days before their plans end.
Most small-group plans offered by Blue Cross Blue Shield come up for renewal in January and February, whereas most individual coverage renews in May.
Although members can keep their coverage until it expires, some might want to switch to an insurance plan offered under the new health insurance exchange, HealthCare.gov, including those who qualify for tax credits.
Credits, based on income, are available for individuals and families up to 400 percent of federal poverty levels.
People face complicated decisions in selecting the best coverage option, said Luther Stueland, director of health policy for the North Dakota Blues.
“It’s challenging because there’s no right answer for everybody,” he said. “It takes time to walk through it.”
Sanford mailed out its notification letters this week, and most members already should have received the notices, or will soon, Krystopolski said.
Besides collecting information on cancellations, Hamm’s office asked the three major health insurers to report the number of enrollments under the new health insurance marketplace provided by the Affordable Care Act.
As of Friday, the three insurers have logged 30 enrollments covering 37 people, a number Hamm called “concerning.”
“That number is very low,” he said. “The Obama administration has to do something quickly to turn that around,” otherwise health insurance sold through the marketplace might not be viable, Hamm said.
The low enrollment figure to date and large number of policy cancellations affirms North Dakota’s decision not to establish its own marketplace, but to forfeit that role to the federal government, Hamm said.
The rollout of the marketplace’s online insurance portal has been plagued by technical problems, making it difficult or impossible for many to enroll.
Blue Cross Blue Shield of North Dakota has advised people to wait for the “bugs” to be fixed, which administration officials have said will happen by the end of the month.