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At least 2,500 ND health plans canceled because of new rules

FARGO — Thousands of North Dakotans who buy health insurance on their own will see their current policies canceled or shuffled beginning Jan. 1 as new federal health care regulations kick in.

Health insurance companies have already sent out cancellation notices in North Dakota and the rest of the nation, routing consumers to new plans that comply with the suite of federal rules in the Affordable Care Act that make some once-optional coverage areas mandatory and set limits on out-of-pocket expenses. Plans that meet those new regulations will be “grandfathered,” but those that don’t will be canceled or upgraded.

In North Dakota, the health care changes will wipe out virtually all of the 2,500 individual insurance plans carried by Medica and Sanford Health.

About 42,500 North Dakotans — roughly 6 percent of the state — were covered by individual plans at the end of 2012, according to state insurance records.

A true tally of how many will be affected may be impossible. Blue Cross Blue Shield of North Dakota — the state’s largest insurer, which covered more than 32,000 through individual plans last year — would not disclose how many of its customers’ current plans will be discontinued. Chief Marketing Officer Judd Wagner said the changes would affect “a very small percentage” of all its customers, including those enrolled through employer groups.

Assurant Health, which covered more than 4,000 North Dakotans last year, also would not share how many of its plans will be phased out.

In Minnesota, state law technically prevents health insurers from canceling policies. But at least 146,000 Minnesotans covered under individual health insurance plans have received notice that their policies are changing, Minnesota Public Radio reported last week.

Of those shuttled to new coverage, some may find more affordable plans. The federal government is offering subsidies to shoppers on the new health insurance marketplace who fall between 138 percent and 400 percent of the federal poverty level.

But with maternity and mental health coverage now required and new limits on out-of-pocket expenses — plus dozens of other new regulations that bolster coverage — rates are rising sharply to pay for the reforms mandated by the 2010 law commonly known as Obamacare.

About 2,000 Medica policyholders were sent letters starting in September and most of them, spokesman Greg Bury said, will see higher premiums if they choose to upgrade their plan.

Lidgerwood farmer Lucas Siemieniewski was one of them.

Siemieniewski received a letter in September informing him that his monthly premium would jump from about $481 to $1,012 if he kept his family of four covered through Medica. His deductibles would increase, as would co-pays, he said.

“I wasn’t very happy,” he said. “It’s gonna be tough.”

Siemieniewski said his family should qualify for subsidies if they opt to buy coverage through the federal marketplace, but the website’s well-publicized woes have made it difficult to find out for sure.

Even then, Siemieniewski said he’s not sure which route they will go.

“I’ve never taken any type of assistance in my life, so I don’t feel real comfortable doing that,” he said.

Sanford Health sent similar cancellation letters to about 450 policyholders.

Several other companies had long been in the process of leaving North Dakota’s individual insurance market, including American Family Mutual.

American Family sent cancellation notices to 668 policyholders in North Dakota, spokesman Steve Wittmer said, routing them to Assurant Health. As it shifted away from health insurance, the company stopped enrolling new customers in 2009 and has been canceling plans across the country.

Wittmer said the cancellation notices, sent in September, were “totally unrelated” to the Affordable Care Act.

Geoff Bartsh, Medica’s vice president of public policy and governmental relations, said the premium hikes for Medica coverage aren’t for nothing.

“You’re not just paying more, you’re getting more,” Bartsh said of the changes to health insurance. “The frustration for some people is they may or may not have wanted more.”

Kyle Potter
Kyle Potter is an enterprise reporter at the Forum. He came to Fargo-Moorhead in May 2013 after stints at the Associated Press, the Las Vegas Review-Journal, the St. Paul Pioneer Press and the Minnesota Daily. 
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