The Chamber Connection (Bismarck-Mandan)

Rising health insurance premiums are taking a toll on the profitability of businesses nationwide. In turn, some employers are raising employee contributions and copayments, while others have altogether stopped providing health benefits.

This results in more uninsured and underinsured people and higher insurance premiums. It’s a vicious cycle that has business owners asking, “What is the root of the problem, and how do we fix it?”

North Dakota Insurance Commissioner Adam Hamm is taxed with these questions every day as he and other staff at the state Insurance Department seek to promote a healthy and vibrant marketplace for the good of the consumer, the insurance industry and North Dakota’s economy. Hamm says North Dakota’s problems are multifaceted.

They include inadequate reimbursement for healthcare providers, limited health insurance competition and everincreasing use of healthcare services. 

All three drive up healthcare prices and, in direct correlation, insurance prices. Addressing reimbursement, Hamm says, “The federal government is not paying its fair share. Medicare reimbursements to North Dakota hospitals are approximately 30 percent behind the national average.”

This inequity, coupled with a lag in reimbursement time, has been a major strain on providers, causing them to raise prices for services, he says. Having several insurance provider options can help businesses and individuals counter the effects of rising prices. “This is not the case in North Dakota,” Hamm says. “Providers are scarce. Therefore, there is little competition to help drive down prices.” 

Blue Cross Blue Shield of North Dakota (BCBSND), the state’s largest health insurance provider, says it already has the lowest individual and employer group premiums in the nation. “We believe that the current health insurance market in North Dakota is sufficiently competitive,” says Denise Kolpack, vice president for corporate communications at BCBSND. 

While the North Dakota Insurance Department works to improve some of these issues, Hamm says consumers can address the greatest factor contributing to rising health insurance premiums—the rapidly growing use of healthcare services. 

He recommends that business owners educate their employees on personal wellness, preventative medicine and disease management. “The key is education, education, education.”  

Kolpack agrees, saying 70 percent of healthcare costs are from preventable chronic illness. “Each of us needs to take responsibility for our own health and wellness. We all can complete a health risk assessment, know our own health ‘numbers’ like Body Mass Index (BMI) and blood pressure, and empower ourselves with knowledge and education.” 

Kolpack encourages businesses to assist their employees in these tasks by organizing company-wide wellness programs, which have many times proven their worth. “Research has shown that implementing worksite wellness programs can save employers money through productivity and less-absenteeism, as well as make for an overall better work environment,” she says. 

Bismarck business shows how it’s done 

Hedahls Parts Plus, an auto parts and accessories company headquartered in Bismarck, has been able to decrease its employees’ use of healthcare services with a wellness program that was initiated in 1993. 

As a partially self-insured company, Hedahls pays directly for its employees’ healthcare between the amounts of $500 (employee deductible) and $25,000 (employer deductible), at which point BCBSND, plan administrator, kicks in to cover catastrophic events.

 President Dick Hedahl explains if employees are generally healthy, the company does better financially with this setup than it would with a traditional insurance plan. If the opposite is true, costs can be devastating. He says the company’s wellness program has been instrumental in ensuring the former happens.

“And, our employees and their families are healthier.” “Since we started the wellness program 15 years ago, the cost of insurance has probably doubled,” Hedahl says, “but we’re still paying 20-30 percent below the market.”

Through the wellness program, employees receive credit toward their portion of the insurance premium above Hedahls’ base contribution. For example, if an employee doesn’t smoke, Hedahls will pay an additional $35 toward his or her monthly insurance bill. Another $35 is paid if the employee’s BMI doesn’t indicate obesity.

Yearly cancer screenings and blood sugar, blood pressure, and cholesterol checks also increase the employer contribution. In this manner, employees can improve their health and get paid to do it. Hedahls benefits, too, with fewer doctor bills. This summer, the company is ramping up its efforts with enhancements to the wellness program.

“We want employees to be more aware of their physical, mental and medical health, so we’re doing a wellness survey in August,” Hedahl says. The survey will be an assessment of individual eating habits, exercise, and other variables that affect personal health.

Hedahl says it will allow employees to see where they are in terms of wellness and, if there are problems, find out what steps they can take to improve the situation. Hedahls employees will also be offered the opportunity to participate in a fitness discounts program announced by BCBSND earlier this year.

The program pays for up to $20 a month in participating fitness center membership fees for people who work out a required number of times each month. In addition, Hedahls is promoting to employees the wellness tools that BCBSND has available online. NDWellnessCenter.com allows users to create a personalized health program and monitor medical conditions for more effective disease management. 

By keeping employees informed and involved in opportunities for improved lifestyles, Hedahls itself is making strides toward improved “business health.”