Godfread Announces Decrease of 20 Percent on Average in Individual Health Insurance Rates with Reinsurance Program

BISMARCK, N.D. – Insurance Commissioner Jon Godfread today released the approved health insurance rates for both individual and small group plans for 2020. Godfread approved the 2020 rates which average up to 20% in savings for North Dakotans purchasing an individual health insurance plan due to the implementation of the state-based reinsurance program.

“With the investment made by our state legislature and the approval of our reinsurance program, I am happy to announce a 20 percent decrease in rates on the individual market. The reinsurance program we proposed, which was supported by the Legislature, provides some much-needed relief to our farmers, ranchers and small business owners,” Godfread said. “While we await further reform from Congress, I am pleased that we took steps at the state level to provide this relief. I encourage consumers who purchase their own health insurance to talk with an agent and shop our competitive market.”

The state-based reinsurance program developed by the North Dakota Insurance Department for the individual health insurance market was approved by the federal government in July and will be in place for the 2020 health insurance plan year. The program creates a reinsurance mechanism known as “invisible” reinsurance. The approach of invisible reinsurance allows enrollees to remain in the individual market with their current plan and carrier while a portion of their claims are reimbursed by the reinsurance pool. Although various carriers process claims differently, the beauty of the reinsurance program is that enrollees are not aware of administrative changes. This means that enrollees will receive payment on their claims as usual while enjoying a rate reduction. Ultimately, the only difference the consumer should notice is a decrease in their premium.

Three major carriers for the individual market are operating statewide on the exchange (HealthCare.gov) and off-exchange (through a licensed and appointed agent), along with four major carriers for the small group market. The 2020 rates are outlined below:
 

According to the Kaiser Family Foundation, in 2017, most North Dakotans accessed health insurance in one of three ways: 

• Employer-sponsored Health Insurance – 58% participated in a group health insurance plan offered by their employer. This includes employees of large and small private companies, federal, state and local government employees and active military.
• Public Health Care Programs – 26% received healthcare benefits through Medicare and Medicaid. 
• Individually Purchased – 9% purchased health insurance on their own through the marketplace or an agent.
• Uninsured – 8% remained uninsured.

Within each method, there are important developments and information consumers should keep in mind as the Open Enrollment Period begins:

Employer-sponsored Health Insurance

• If already covered by an employer-sponsored plan, consumers should pay close attention to enrollment options this year. Premiums and coverage limits may have changed. 
• If an individual has recently changed jobs or plans to change employment, they may be subject to a probationary period, up to 90 days, during which they are ineligible for group coverage. 
• If coverage from a previous employer is lost, an individual typically has 60 days to enroll in private individual insurance on an exchange through a Special Enrollment Period.
• Consumers are encouraged to contact their employer with questions about their Health Savings Account or Flexible Spending Account, or if they have questions about enrolling in either.

Public Health Care Programs

• Medicare and Medicaid are government programs that help pay for health care. However, benefits, costs and eligibility requirements differ:
  • Medicare is a federally funded program available to most U.S. citizens and permanent legal residents age 65 or older who have lived continuously in the country for at least five years. People younger than 65 may also be eligible for Medicare if they are disabled, suffer from kidney failure or ALS (Lou Gehrig's disease).
  • In contrast, Medicaid is jointly funded by federal and state governments. Eligibility is means-based and the program has strict income requirements that vary from state to state.
• Open enrollment for Medicare Advantage and Medicare Prescription Drug coverage (Part D) takes place from Oct. 15 through Dec. 7, 2019. If an individual misses the deadline and did not experience a qualifying event, they can still apply during general enrollment (Jan. 1 through March 31 of each year), though they will have to pay a premium penalty.
• High-income earners (more than $85,000 single filing tax return or $170,000 for joint filing tax return) may see increases in 2019 Medicare Part B premiums. Enrollees should contact Medicare for an estimate and plan accordingly.
• Medicaid enrollees should pay particular attention to possible changes to eligibility and coverage options. 

Individually Purchased Health Insurance

• The 2020 Open Enrollment Period will run Nov. 1 through Dec. 15, 2019. Coverage begins Jan. 1, 2020. Consumers can begin researching their options at any time.
• Those who currently have coverage through the exchange and do not choose a plan for 2020 will be re-enrolled in the same or a similar plan. Consumers should take notice that this re-enrollment could result in higher costs to the consumer.
• There are two ways to purchase individual insurance, either through the federally run health care exchange on HealthCare.gov or via a licensed insurance agent. A licensed insurance agent can help you with both methods, but if you qualify for an individual subsidy, you must purchase your insurance through the federally run health care exchange to receive a subsidy. A qualification calculator is available at www.healthcare.gov/lower-costs/qualifying-for-lower-costs/.

Most of North Dakotans are covered by health insurance plans offered through employers that self-insure, participate in “grandfathered” plans purchased before March 2010 or receive benefits from government plans (such as Medicaid, Medicare, Tricare or federal employee plans). Today’s announcement will not affect the rates for these consumers. 

As the 2020 Open Enrollment Period begins on Nov. 1, many North Dakotans must soon make critical decisions about their 2020 health insurance amid a barrage of news and opinions regarding health care. To help consumers choose the right coverage for themselves and their families, the Department recommends consumers:

1. Start early. With more information gathered, smarter decisions can be made.
2. Stay well-informed. The health insurance landscape is evolving rapidly. What is true today may be outdated tomorrow.
3. Shop around. What made sense this year may not be the best solution next year, particularly if an employment situation has changed. Take time to shop around and compare prices and plan benefits amongst different insurance companies.