Maryland's Obamacare Exchange Disaster Leaves North Dakota Company With Over $56 Million In Losses
Blue Cross Blue Shield of North Dakota recorded a nearly $80 million loss in 2013 according to a financial disclosure filed with the state Insurance Commissioner’s office, and about $51 million of it was attributable to the company’s adventure with Mayrland’s health insurance exchange:
The biggest share of the North Dakota Blues red ink was a $51 million loss associated with Noridian Healthcare Solutions, which sustained heavy losses from a contract to build the Maryland health care exchange.
Customers’ health insurance premiums will not go up as a result, however, because insurance regulators only approve rate increases based on past and predicted medical claims, as well as administrative costs, which are 7.7 percent of premiums, von Ebers said.
“We are doubling down our efforts to cut administrative costs,” he said. “We’re trying to be as conservative as we can be.”
This is a much bigger loss than the $17.1 million in losses the company was projecting back in February, but it was clear they saw trouble on the horizon. In late December BCBSND sent out a letter to state legislators announcing their intention to withdraw from the state’s expansion of Medicaid, which was an element of the federal Affordable Care Act implemented by the state, citing financial risks.
“BCBSND is unable to assume the financial risk in the arrangement and is obligated to protect the company and its members from the unidentified claims costs for this population,” the letter read.
Keep in mind that BCBSND was one of the loudest lobbying forces behind the push for North Dakota to establish its own state-level Obamacare exchange.
Given the disaster in Maryland that BCBSND was very much a part of, not to mention other state-level disasters like the Oregon and Minnesota exchanges, I think we can all be glad that North Dakota dodged that particular bullet.