Blue Cross Blue Shield: Some premiums going up 5.4 percentHealth insurance premiums for customers of Blue Cross Blue Shield of North Dakota are going up an average of 5.4 percent for groups and 9.7 percent for individuals.
By: By Patrick Springer, Forum Communications Co., The Jamestown Sun
Health insurance premiums for customers of Blue Cross Blue Shield of North Dakota are going up an average of 5.4 percent for groups and 9.7 percent for individuals.
Members of two small groups, however, got a jolt this week when they received letters informing them their rates would jump about 40 percent beginning Oct. 1.
It turns out the letters were in error, the result of crossed signals between state insurance officials and the company. The problem was resolved Friday, and increases for the groups will be roughly 20 percent.
“I fully understand any increase is hard on people’s checkbook,” Insurance Commissioner Adam Hamm said Friday. “An increase was required, based on all the information available. I know folks don’t like to hear that,” but he can’t alter the facts.
Denise Kolpack, a spokeswoman for Blue Cross Blue Shield, said both groups — each consisting of about 1,500 people — had claims expenses surpassing premiums.
“We do not want one product absorbing the losses or expenses of another,” she said.
One group involves people who cannot qualify for the standard individual insurance pool, usually because of some medical condition.
“It’s a higher-risk pool,” Kolpack said, with claims running $1.63 for every dollar in premiums, resulting in a loss over the last 20 months of $11.5 million.
The group’s last premium increase was five years ago. Starting Oct. 1, premiums will rise 20.8 percent, or $117 per month, compared to the company’s requested increase of 39.8 percent, Hamm said.
“These policies are typically for folks who are less healthy,” he said.
The other group involves students, with claims running $1.17 for every dollar collected in premiums, resulting in a loss over the last 20 months of $695,000.
The student group’s premiums, which last increased three years ago, will go up 22.2 percent, or $21 a month, Hamm said.
About 300 of the higher-risk group’s customers received letters erroneously informing them their premiums would increase about 40 percent.
The notification error stemmed from a misunderstanding between insurance officials and Blue Cross Blue Shield of North Dakota as both sorted through a more complicated review process.
New federal health reforms distinguish between coverage groups existing before or after reform legislation passed six months ago.
Overall, Hamm granted an average increase of 5.4 percent for groups, compared to the company’s request for an increase of 7.7 percent. The Blues had sought a 19.6 percent cumulative increase for individuals; Hamm granted a 9.7 percent increase.
About 1 to 1 1/2 of the increase stems from the first round of health reforms, he said, but he cautioned that substantial increases loom for further reforms, most to be phased in by 2014.
Premiums for each insurance group depend on its unique claims experience, Kolpack said, stressing that “many variations” apply to rates for different groups.
In August, Blue Cross Blue Shield of North Dakota said medical inflation generally was running about 8.8 percent, compared to 5.5 percent last year and 9.8 percent in 2008.
Patrick Springer is a reporter at The Forum of Fargo-Moorhead, which is owned by Forum Communications Co.