BISMARCK, N.D. – Insurance Commissioner Jon Godfread today confirmed that the Insurance Department was informed late Wednesday, Sept. 27, that Medica does not intend to sign an agreement with the federal government to offer coverage on the Affordable Care Act (ACA) Exchange for their individual health insurance in North Dakota for 2018.
“We have had numerous conversations with Medica over the course of the past few months, and given the uncertainty that currently exists around cost sharing reductions, they are unable to move forward in the Federal Exchange,” Godfread said.
Cost sharing reductions (CSRs) are payments made by the federal government to insurance carriers to help low-income consumers with out-of-pocket costs, such as co-payments and deductibles. Recent health care debates have included consideration by the federal government to not provide CSRs to carriers. After originally making the decision to file rates with CSR funding included, Medica has now requested that the Department approve premium rates for 2018 assuming CSRs would not be paid, which would have led to an additional increase in those rates, on top of the initial rate increase already being requested by Medica.
The Department has declined to approve any rates requested under this assumption.
“Although we understand Medica’s concerns regarding the uncertainty of CSR funding, without knowing the intentions of Congress regarding CSRs, we had to make the decision to move forward with rates that assumed payments would be made,” Godfread said. “If the Department approved rates requested by Medica excluding CSR payments, and Congress does fund those payments, it is unknown if the Department would then be able to reduce the rates to reflect the changes made. With this in mind, the Department felt it was our responsibility to err on the side of caution and protect North Dakota consumers from any unnecessary increases. The decision made by Medica, illustrates that North Dakota will not be insulated from the collapse of the ACA, and our consumers who purchase health insurance on the federally run exchange will now face fewer options.”
North Dakota consumers will still be able to purchase an individual health insurance plan from Medica through means outside of the ACA Exchange, such as with an insurance agent versus the Healthcare.gov website. Consumers seeking a subsidy for their health insurance will be unable to purchase plans from Medica on the federally run exchange. Of the 20,691 individuals on the Exchange, Medica provides coverage for 3,073.
“This situation is one the Department understood to be a possibility but we were hopeful that Congress would come to a resolution regarding health care reform and that we would have more answers at this point. Unfortunately, that is not the case and because of that failure, Obamacare has continued to crumble. Medica’s decision further illustrates just how unstable the ACA Exchange is and will hopefully be a reminder to Congress that Obamacare is indeed in a death spiral. It is no longer sustainable and now North Dakotans are not only facing higher rates, but also fewer options,” Godfread said.