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ND Blues get OK for $45 million settlement for botched insurance exchange

FARGO -- Regulators have signed off on a $45 million settlement between a subsidiary of Blue Cross Blue Shield of North Dakota and the state of Maryland over a botched health insurance exchange.

FARGO -- Regulators have signed off on a $45 million settlement between a subsidiary of Blue Cross Blue Shield of North Dakota and the state of Maryland over a botched health insurance exchange.

Insurance Commissioner Adam Hamm approved a request by Blue Cross Blue Shield to guarantee the settlement by its subsidiary, Noridian Healthcare Solutions, which was the prime contractor chosen to create the Maryland online health insurance marketplace.

Hamm is allowing Blue Cross Blue Shield's parent company, Noridian Mutual Insurance Co., to pay up to $18.25 million to Noridian Healthcare Solutions for the settlement under an order signed Wednesday.

"Leadership at the company has taken responsibility for the failed project and this transaction provides the best potential for securing future operations of the organization," Hamm said in a statement Thursday.

Maryland had claimed damages of more than $100 million for the exchange, which crashed after launching in 2012 and ultimately was scrapped. Hamm's findings and order noted that the North Dakota Blues and subsidiary avoided spending about $15 million in legal fees by settling.

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The North Dakota Insurance Department, Hamm added, "demanded significant changes" in the North Dakota Blues' "oversight of its subsidiaries and its future analysis of any subsidiary actions."

Tim Huckle, president and chief executive officer of Blue Cross Blue Shield of North Dakota, said the settlement should not have a significant impact on policyholders, noting that Noridian Healthcare Solutions operates as an independent subsidiary.

"A subsidiary's financial gain or loss does not impact the determination of insurance rates for BCBSND customers," Huckle said in a statement.

"While this process has been difficult, we can now move forward, confident the settlement agreement with the state of Maryland was the best path forward for our membership and employees," he said.

Related Topics: HEALTH
Patrick Springer first joined The Forum in 1985. He covers a wide range of subjects including health care, energy and population trends. Email address: pspringer@forumcomm.com
Phone: 701-367-5294
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