North Dakota’s legislature put up $31 million with the hope of lowering insurance premiums on the individual market. New data Tuesday shows that move paid off for most of those health insurance plans.
Reinsurance is basically insurance for the companies. The state’s money will offset some of the highest risk for insurance companies, putting a downward pressure on premium prices. The difference between where prices would have been without reinsurance and where they will be for 2020 is about 20 percent. Even with the drastic change, ND Insurance Commissioner Jon Godfread says this is a temporary fix.
“What this program does is buy us two years to provide some relief to those farmers, ranchers, and small business owners who desperately need it, buy us some time to get to that reform,” said Godfread.
Getting that reform will be tricky. Godfread worked in previous years for a waiver, similar to the one approved for the reinsurance program, to craft incentivized plans. One example is cutting a person’s premium if they quit using tobacco products. The federal government didn’t approve the waiver, which Godfread says is frustrating.
“The fact that we’ve got to take a good idea forward, as the Insurance Commissioner who knows out marketplace and works in our marketplace,” Godfread started. “to have to go in and say here’s a good idea for our citizens, then I have to go get approval from somebody over here, it seems a little backwards to me.”
Medica and BlueCross BlueShield of North Dakota both issued statements supporting the reinsurance program.
““North Dakota’s reinsurance program is providing immediate relief to individuals and families buying health insurance on their own. Commissioner Godfread and the legislature deserve a lot of credit for working with the industry to provide this relief. This is a good example of a private-public partnership that is benefiting North Dakota families.”
From Andrea Dinneen, BlueCross BlueShield of North Dakota:
“Blue Cross Blue Shield of North Dakota continues to find ways to make health care costs and premiums more affordable for our members, while also providing the financial security our members are looking for. We commend the North Dakota Insurance Department’s efforts and support the reinsurance program, which we expect will bring much needed relief and stability to the folks that need it. The approved rates will result in a decrease in premiums for Individual Marketplace members in 2020. In the long term, we hope the reinsurance program will continue to provide benefit to our members by offsetting the increased costs of health care services we’ve seen in North Dakota, along with an increase in the number of services our members are using. Premium rates will vary by age and benefit plan and we work tirelessly to keep the rates as low as possible on behalf of our members.”