May 5, 2010-Minot Daily News
Hamm: Premiums will likely rise
By JILL SCHRAMM, Staff Writer jschramm@minotdailynews.com
Higher health insurance premiums might be inevitable once health reforms go into full effect in four years, North Dakota’s insurance commissioner told insurance agents in Minot Tuesday.
Commissioner Adam Hamm spoke to members of Independent Insurance Agents of North Dakota and Professional Insurance Agents of North Dakota at their joint convention in Minot this week. He said that his office has been swamped with consumer calls about health reform, and the most common concern is the potential effect on premiums.
“The reality is that health-care spending is likely to continue rising far faster than general inflation well into the future. That’s going to result in higher premiums. While some folks who have health problems may see their premiums decrease, for most Americans, premiums are going to continue to increase from year to year,” he said.
Hamm said what makes health care in this country unsustainable is the affordability. But the reform bill focused on expanding access, which only drives cost up. Once guaranteed coverages promised in the reform bill are are added by 2014, premiums could rise dramatically, he said.
“That’s because you are going to add those layers to a policy, but on the back end you have this mandate that a number of folks consider to be far too low to force people into the pool. So people are going to start putting pencil to paper and start figuring what’s cheaper. Is it cheaper to go and get health insurance coverage in 2014 and pay those premiums until I need the coverage? Or is it cheaper not to buy coverage, wait until I or my family needs it, pay the penalty, then buy my health insurance? That’s going to be the analysis that Americans are going to go through starting in 2014. And that is what is scaring insurance companies because from an actuarial analysis, they are starting to see that this thing just might not exactly add up.”
Blue Cross Blue Shield testified to a legislative interim committee that once reform is in place in 2014, it projects needing rate increases of about 15 percent in its group market and 75 to 100 percent in its individual market. That is on top of regular rate increases averaging 8 to 13 percent,
“Obviously, that’s something that greatly concerns me,” Hamm said. “We have an insurance market in North Dakota that was starting to move in the right direction and we are doing things that I thought were positive, and now I am very troubled with what is going to happen in 2014. If any rate increases like that are sought and are justified meaning they would have to be approved that runs the risk of literally blowing up the insurance market.”
Should that happen, the federal government could increase subsidies to help people afford insurance, which means higher taxes to pay for those subsidies, he said. Or the government could eliminate some reforms. Hamm said his experience is that once reforms are created, it’s difficult to take them away.
Repealing provisions of the law also would be difficult, Hamm said. The bill’s scope and the revenue streams tied into it are so extensive that the entire package would have to be repealed.
“You hear a lot of people say the jury is still out. To me, that’s the wrong analogy. I am not even sure the jury can be deliberating at this point. You have a law that is so immense in scope and so all encompassing in what it is going to cover and so many things are yet to be worked out in how this law is actually going to be implemented and interpreted that I don’t think the jury can start deciding whether or not it is good or bad until 2014, until it is actually up and running and everything is implemented. Then you take a couple years and you figure out success or failure.
“If it’s a failure, then we are really in trouble. Because the system was unsustainable the way it was,” Hamm said. “If this law is a failure and it doesn’t work, then that will only have compounded the problem that we still have.”
Fact Box
Reform could cost N.D.
Federal
The insurance department might need to add about 20 full-time employees at an ongoing biennium cost of about $4 million, not including technology aspects related to computer software that will be needed, Hamm said. The state’s Human Services Department might need about 30 more employees and more than $100 million over 10 years to implement the law, he said.
North Dakota already has notified the federal government that the state will not operate the federal government’s new, temporary high-risk health insurance pool. The reform law creates the pool but gives states authority to run it. If a state declines, the federal government will run the program for that state.
Hamm explained that the money set aside by the federal government to help fund the pools until 2014 is expected to run out in 2011 or 2012. States operating pools then might have to pick up the tab.
“The bottom line is I told the federal government last Friday that the state of North Dakota is not going to participate. If you want to run this high-risk pool, go ahead,” Hamm said. “You are going to make the promise, you are going to pay for it.”
North Dakota’s congressional delegation differs in the assessment of the bill’s costs. Sens. Kent Conrad and Byron Dorgan and Congressman Earl Pomeroy, all D-N.D., voted for the bill.
A fact sheet from the House offered by Pomeroy’s office showed that a typical family of four making $55,500 a year would pay about $100 a week in premiums and have average out-of-pocket costs of $9,650, a $7,600 savings. Savings would be even larger for families earning less. Subsidies would be available for families earning up to $88,800 a year to reduce costs from current levels.
Pomeroy’s office noted the bill also eliminates the
State Rep. Rick Berg, R-Fargo, who is running against Pomeroy for the U.S. House seat, said the bill will increase the deficit because plans to pay for reform through student loans and cuts in doctor reimbursements aren’t materializing as projected. In addition, he said, information presented to legislative committees indicates the 10-year cost of the reform bill on North Dakota could be more than $150 million.
“That’s going to compete with K through 12 (education). It will compete with other human services programs. It’s general fund money,” he said. “We have a pretty good system of health care in North Dakota, and we should be building from that, not having this Washington version of government health care.”
Berg said there is a window of opportunity to modify the bill before it takes full effect in 2014.
“Certainly with a majority vote, changes can be made,” he said.
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Market gets more competitive
North Dakota’s health insurance market will become more competitive in coming months with the entry of a third provider.
Sanford, a non-profit health maintenance organization and the second largest health insurer in South Dakota, obtained permission from the North Dakota Insurance Department in February to operate in North Dakota. It still must present products and rates for approval.
Medica, the second-largest health insurer in North Dakota with 4.6 percent of the market, announced in April that it will be introducing individual health plans. It currently offers only group products.
The state’s largest insurer, Blue Cross Blue Shield of North Dakota, has not increased rates in its individual market in the past two years but raised rates by 12 percent on May 1. In the group market, the North Dakota Insurance Department is allowing the Blues to try quarterly rate increases, which is proving to more accurately reflect what is happening with claims and trends, Insurance Commissioner Adam Hamm said. Over the past three quarters, the overall increase approved for group plans by the department has been 4 percent.
May 1, 2010-Bismarck Tribune
Feds to run high-risk pool for North Dakota
By REBECCA BEITSCH Bismarck Tribune | Posted: Saturday, May 1, 2010 2:00 am
North Dakota is leaving control of a new program required by the health care law in the hands of the federal government.
The law paves the way for a new high risk pool — a government-run plan that offers health insurance for those too sick to get it on their own — to be run either by the states or, if they decline, by the federal government.
Friday was the last day for states to inform the federal Department of Health and Human Services what action they’d be taking, and a letter penned by Insurance Commissioner Adam Hamm said the state will leave responsibility for the high risk pool with the federal government. At least 11 other states took the same action.
“I had serious concerns that the money the feds have allocated would be sufficient to run it until it expires,” Hamm said.
As outlined in the law, $5 billion would be doled out to states to run the temporary program until it expires on the last day of 2013. North Dakota’s share of that money would be about $8 million.
However, Hamm said research from another federal entity, the Centers for Medicare and Medicaid Services, showed that money could run out by 2011 or 2012.
“North Dakota can’t afford to be stuck with an unfunded mandate,” Hamm said.
Regardless of the financial aspect, because of the biennial sessions, the state also would have faced difficulty in creating a high risk pool on a timeline that corresponded with the federal governments.
“It’s just the timing,” said Rep. George Keiser, R-Bismarck, chairman of the committee that held a meeting on the new health care law Wednesday. “We can’t give him (Hamm) any more money to operate the high risk pool. We can’t give him any more staff. He can’t get it up and running. Because it is temporary, we’ll let them have it and sit back and watch them struggle in operating it.”
Although the state already runs its own high risk pool, CHANDS, that program cannot be used as a substitute for the new high risk pool. Those who are already in CHANDS will keep their coverage. To qualify for the new program, a person would have to have a pre-existing condition and have been without insurance for at least six months.
Hamm said it’s not clear how the insurance would be administered. The roughly 1,500 people in CHANDS receive service through Blue Cross Blue Shield.
After 2013, states will be able to chose whether they want to continue running any type of high risk pool program.
“When you look at the big picture, when you analyze it completely, it comes back to what happens if the money runs out,” Hamm said. “And there wasn’t a legitimate answer from the federal government for that.”
April 30, 2010-Grand Forks Herald
N.D. won’t join federal high-risk health insurance pool
By: Associated Press
BISMARCK — North Dakota’s insurance commissioner said the state won’t take part in a temporary federal health insurance program meant for people with existing health problems.
Adam Hamm said North Dakota already has an insurance pool for high-risk customers. It is run by the Comprehensive Health Association of North Dakota and partly financed by the insurance industry.
The federal high-risk program will offer subsidized health coverage for people who have not had insurance for at least six months.
Hamm said he’s concerned the federal government will not provide enough money to run a North Dakota program until it ends in January 2014.
Hamm said the North Dakota Legislature will have to approve some changes in state law to allow North Dakota to take part.
Text of North Dakota Insurance Department Press Release:
Hamm: North Dakota elects not to participate at this time in federal government’s new temporary high risk health insurance pool
Posted on 4/30/2010
BISMARCK, N.D.-North Dakota Insurance Commissioner Adam Hamm, in a letter today to the United States Secretary of Health and Human Services (HHS), said that North Dakota will not operate the federal government’s new temporary high risk health insurance pool.
Hamm wrote, “I have carefully analyzed and considered this issue, including conferring with elected state leaders and the Board of Directors of North Dakota’s existing high risk insurance pool (Comprehensive Health Association of North Dakota (CHAND)). I have come to the conclusion that at this time the State of North Dakota will not seek to operate this new temporary federal insurance program.”
The temporary high risk pool was created by the federal health care reform law for high risk individuals with pre-existing conditions. In order to be eligible for coverage, individuals must have been uninsured for six months. Hamm went on to convey to HHS Secretary Kathleen Sebelius his concerns with the new federal high risk pool program.
“I am very concerned that the allotted money for this new federal program (you have estimated that North Dakota’s potential allocation would be approximately $8 million) may be insufficient to fully run the program until it ends on January 1, 2014.”
“North Dakota simply cannot afford to get stuck with an unfunded mandate,” Hamm said.
Hamm also explained that CHAND’s authority comes from statute and that if the legislature desires to further analyze this issue he will work with them to evaluate whether to allow HHS to continue the program in North Dakota or seek to integrate it into North Dakota’s current CHAND program in the upcoming legislative session.
The federal government’s new temporary high risk pool is the first of many provisions of the federal health care reform law that North Dakota and other states will be considering, and in his letter Hamm stressed to the federal government that he will thoroughly review each issue on behalf of the people of North Dakota.
April 28, 2010-Bismarck Tribune
Lawmakers hear testimony on new health care law
By REBECCA BEITSCH Bismarck Tribune | Posted: Wednesday, April 28, 2010 6:21 pm
With some deadlines only days away, the Industry Business and Labor committee heard testimony Wednesday regarding the new health care law and what action the state needs to take to be compliant.
The state needs to communicate to the federal government by Friday how it intends to establish an insurance pool for those too sick to purchase insurance or the federal government will head the task of administering it.
That news came from Insurance Commissioner Adam Hamm, and consensus was quickly built among committee members that allowing the federal government to take over a state pool program for the uninsurable would not be an option.
Testimony from Hamm and other state agency heads indicated that additional staff would be needed to help deliver the measures set forth in the law and keep track of approaching deadlines.
Hamm said his office is considering filling its one vacant position with a lawyer who will help them keep track of what changes need to happen in accordance with the law’s various phase-ins.
“Quite frankly we’re getting to the point already, just a month after this thing has become a law, where we’re starting to get really nervous. Are we missing anything? Are there gaps in our state law that we need to be addressing in the next legislative session so that we don’t run afoul of the federal government and get preempted?” Hamm said.
Depending on whether the state charges the insurance department with overseeing the various health insurance exchanges, Hamm estimates his department will need as many as 19 more full-time employees and nearly $4 million in additional funds, although more will be needed later to update a website to house exchanges and other information about the law.
“They’re going to be coming back to us with a lot of new budgetary figures,” said committee Chairman Rep. George Keiser, R-Bismarck. “These departments can’t just go out and hire the people they need to deal with all this, they have to come to the Legislature first and get the money.”
The Department of Human Services faces the task of administering a much-expanded Medicaid program, which will now incorporate a greater income range and for the first time is now open to childless adults.
Maggie Anderson, director for the medical services division of DHS, said that will mean nearly an additional $106 million to the state as the program is implemented through 2019 and also would mean the department would need another 30 full time employees.
Keiser said one of the problems with having a session every other year is the inability to deal immediately with approaching deadlines like the high risk pool, programs that provide assistance to pregnant minors, and various grants from the federal government.
Another looming deadline is how the state plans to address the portion of the law dealing with health insurance exchanges. Plans that are included in the exchanges must meet certain criteria set forth in the law, but states are permitted to pass more stringent requirements of the plans and oversee the operation of the exchange.
A number of legislators have expressed interest in a regional exchange with nearby states, and while Hamm agreed to exploring this option, he’s not sure how such a program would be administered across state lines.
Hamm said a decision needs to be made in the 2011 legislative session because, while the exchanges won’t being to function until 2014, they must be certified by the federal Health and Human Services Department by the Jan. 1, 2013, just before the start of the 2013 session.
The law says online information about the exchanges must rate all the plans according to quality and cost and must provide an income calculator that tells people whether or not they are eligible for Medicaid or the State Children’s Health Insurance Program — a move that could direct more people to services administered by DHS.
The committee also heard testimony from Blue Cross Blue Shield.
Paul von Ebers, chief executive of Blue Cross Blue Shield of North Dakota, said his company has some serious concerns over the law, namely that while the company would likely pick up some business as the reforms take effect, it may not bring them much in the way of healthy clientele.
“It’s good news, bad news. Obviously more business means we can spread out the costs among our base. The bad news is we think most of the new people coming into the system will be sicker,” von Ebers said.
That sentiment was not shared by Joshua Goldberg, who gave testimony on behalf of the National Association of Insurance Commissioners.
“We’re likely to see something rarely mentioned in health circles called a health spiral. People usually talk about a death spiral where risk in a plan degrades over time, yet premiums go up, and it’s a vicious cycle. We’re looking at the opposite here because there’s a good chance that individuals that are older and sicker will be attracted to the new plans which are more favorable to them,” said Goldberg, meaning traditional plans will soon be left to the healthy.
Either situation could be bad if sick and healthy populations are segregated and risk cannot be shared.
Von Ebers said that while prices would not skyrocket immediately, it was likely that premiums would go up.
Several Republicans on the committee said they were discouraged by some of the testimony but said it was time to move past their partisan feelings about the bill and move forward in complying with it in the smartest way possible.
“It’s the law of the land, and we have to work with it the best we can,” said House Majority Leader Al Carlson, R-Fargo.
“This is where the rubber hits the road,” said Keiser, adding that the Legislature really doesn’t have that much time to get seriously prepared for the next session. “We need to move carefully, judiciously, and quickly.”
The committee meeting provided the first opportunity for many legislators to hear a presentation on the general provisions of the law and ask questions of a panel of experts.
April 2010-Turtle Mountain Star (new healthcare law)
By Mike Manston
For The Star
A week after the historic healthcare bill was signed by President Obama, the only certainty for local healthcare administrators is they don’t yet know how the bill will affect area facilities.
“It’s such a big bill and very complicated, I think everyone’s still trying to figure out what’s in it,” said Kimber Wraalstad, CEO of Rolla’s Presentation Medical Center.
While the new bill is supposed to benefit more than 30 million new people who haven’t been able to afford healthcare coverage under the old system, Wraalstad indicated that there won’t be much of a change in care provided by PMC.
“I’m not certain there’s much in it for the smaller hospitals, but we’ll eventually get it figured out and continue to do what we need to do to take care of people……
Insurance impact
North Dakota Insurance Commissioner, Adam Hamm, indicated he and many of his colleagues from other states have serious concerns about the long-term effects of the new legislation. Hamm said some projections from Blue Cross and Blue Shield of North Dakota while legislation was making its way through Congress indicated North Dakota insurance premiums could rise by as much as 15 percent for small businesses and severely effect individual policy holders who might see as much as a 75-100 percent increase in premiums when all of the mandates of the bill finally kick in.
“In analyzing the bill, there are some very good things in the bill, but myself and other insurance commissioners from different states really believe it could raise insurance premiums dramatically in the next few years. Unless or until the cost containment issue of medical costs is addressed, we have some serious concerns.”
“There’s no way to know what’s going to happen, but it will have to be tweaked or fixed before everything kicks in in 2014. Expanding access is a laudable goal, but we have to figure out better ways to pay for it. The current system was unsustainable, but some issues definitely need to be addressed.”
Hamm said the bill mandates individual states to set up Health Insurance Exchanges, which in theory, could potentially be a good part of the legislation. Health Insurance Exchanges are entities that will allow small businesses and and individual policy holders to pool together to find lower insurance premiums. “This could be potentially a good part of the bill, but how it will work remains to be seen,” Hamm said. Right now, everybody is in a dead sprint to keep on top of the conditions in the bill and figure out what it’s going to mean to the individual states.”
If the North Dakota Insurance Department becomes the agency required to set up and maintain that mandated Health Insurance Exchange, Hamm estimated that an additional 15 to 20 people would likely be required to operate the new department. Where the funding for those additional positions would come from is still in question, one of the many questions that needs to be answered in the future.
Kevin Svingen of First State Insurance of Rolla and Bottineau said he believes the bill could have negative effects on individual policy holders. Svingen admitted that he doesn’t have much knowledge about the legislation except for what he has heard on the street and read about it, but he is taking a wait-and-see approach before passing judgment.
“I personally think it’s going to have a more negative effect than most people think,” he said. “We don’t do a lot of our business in health insurance and a lot of people have already left that industry. If companies are going to have to pick up people with pre-existing conditions and take everybody, it’s definitely going to cause higher premiums. The biggest thing, I believe, is what’s going to happen with immigration and how that is going to be dealt with in regard to insurance coverage.”
April 16, 2010-KFGO The Mighty 790
New website section helps consumers and businesses understand health care reform
BISMARCK, N.D.—Insurance Commissioner Adam Hamm today encouraged North Dakotans to visit the Insurance Department website—www.nd.gov/ndins—to learn more about the new health care reform law and how it will affect them.
The North Dakota Insurance Department is fielding countless questions surrounding the Patient Protection and Affordable Care Act signed into law on March 23. In response, the Department has created a new section on its website, featuring frequently-asked questions aimed at helping consumers and business owners understand the new law, as well as a timeline showing the implementation scheduled to take place over the next nine years.
“Understandably, consumers, business owners,
“We’re also working hard to evaluate the impact this new law will have on consumers’ insurance premiums,” he said.
Many details regarding the new law are not yet available; as the Department learns more, the information on the website will change.
Visit the health care reform website section at www.nd.gov/ndins/consumer/reform. If you have a question that is not answered on the website, contact the Insurance Department at 1-800-247-0560 or insurance@nd.gov.
April 9, 2010-North Dakota Insurance Department
Hoeven, Hamm encourage North Dakotans to access long-term care insurance program, tax credit
BISMARCK, N.D.-Governor John Hoeven and Insurance Commissioner Adam Hamm today encouraged North Dakotans to plan for the future by looking into long-term care insurance and learning more about a state program that makes it more affordable to obtain.
Nearly three out of every four people will need long-term care services during their lives. Planning in your 40s or 50s when long-term care insurance premiums are more affordable may help you save money, allow you to stay at home if you need long-term care and reduce future financial burden on yourself and your family. The average cost for nursing facility care in North Dakota is more than $71,000 a year.
Through a special partnership program, North Dakotans may be able to retain assets they would normally be required to spend on long-term care. Individuals who purchase a long-term care insurance policy that qualifies for the North Dakota Long-Term Care Partnership Program can apply for Medicaid under special rules. These rules allow them to protect assets equal to the insurance benefits received from a partnership policy.
“The Long-Term Care Partnership Program helps individuals buy long-term care insurance, which will help protect assets for their families that otherwise would go to pay for nursing care,” Hoeven said.
Long-Term Care Partnership policies issued after Jan. 1, 2007 also qualify for an annual $250 North Dakota income tax credit, thanks to a bill passed in the 2009 legislative session.
“The credit is equal to the premiums you paid during the tax year, up to $250, or $500 if both spouses are insured by the policy,” Hamm said. “If you purchased a long-term care insurance policy in 2009 that qualifies for the Partnership Program, be sure to claim the appropriate credit on your taxes before April 15.”
Hamm added that Medicare generally does not cover long-term care, and Medicaid only pays for people meeting income and asset rules. Long-term care insurance may include coverage for home care, provide reimbursement for loved ones who take time off work to help provide informal care, help pay for assistive devices and cover basic care, assisted living facility care and nursing home care.
A list of policies qualifying for the Partnership Program is available on the Insurance Department website:
www.nd.gov/ndins/consumer/longterm/approvedltc. For more information, consult your insurance agent, your county Social Services agency or the North Dakota Insurance Department at 1-800-247-0560 or insurance@nd.gov.
April 8, 2010-The Jamestown Sun
Hamm warns of fraud scheme
North Dakota Insurance Commissioner Adam Hamm said in a news release that consumers should be cautious about a new fraud scheme emerging in the wake of the federal health care reform law.
Since the recent passage of the health care reform law, several states—including Minnesota — have reported that consumers are being approached by individuals trying to sell insurance policies and discount medical plans or cards on behalf of the federal government. When questioned, these individuals will not give a name, address or phone number.
“Use common sense when making decisions about your insurance,” Hamm said. “You should be suspicious of anyone who will not provide a name or contact information.”
Some of the policies and discount plans these individuals are selling are being bundled with a limited benefit insurance policy, Hamm said. Claims are not getting paid, the plans are being sold through unlicensed individuals, and the policies are not approved by the state in which they are being sold.
“When making decisions about any type of insurance, I strongly encourage consumers to check with the Insurance Department to be sure the agent or company is licensed to do business in North Dakota,” Hamm said.
Most major changes in policies under the new law won’t occur immediately. Anyone who is solicited in this way is urged to contact the Insurance Department. Consumers can verify the license of an agent or company on the department’s Web site, www. nd.gov/ndins, or by calling 1-800-247-0560.
March 30, 2010-Jamestown Sun
Former insurance agent faces 24 charges of theft
By: Katie Ryan, The Jamestown Sun
The Stutsman County States Attorney’s office charged a former Jamestown insurance agent with two dozen counts of theft of property this month.
Rex Graves, Jamestown, was accused of 23 counts of theft of property in regards to insurance-related misappropriations. He is accused of using all or parts of insurance premium payments for his own personal benefit between July 2008 and March 2009. Clients were left without insurance on their homes, farms and vehicles, Insurance Commissioner Adam Hamm said in a May 2009 press release.
Hamm revoked Graves’ insurance license that year. Graves was also barred from the business of selling insurance.
About two dozen people were affected. The total loss, however, is not known, said Fritz Fremgen, state’s attorney. Fremgen said his best estimate was a loss of thousands of dollars.
The State’s Attorney also served Graves a 24th charge of theft of property and a forgery charge, but those aren’t insurance-related, Fremgen said. Graves is accused of forging a $700 check from a foundation. He is also accused of skimming that foundation’s banquet proceeds for $3,000 and taking $350 meant to buy a piece of jewelry at the banquet’s silent auction.
The theft of property charges range in severity from Class B misdemeanors to Class B felonies. The forgery charge is a Class C felony.
Attempts to reach Graves for comment at his home or office were unsuccessful as those numbers have been disconnected.
A date from Grave’s preliminary hearing has not been set. He is out on bail. Conditions include no gambling, Fremgen said, and no possession or ownership of firearms
February 24, 2010-Bismarck Tribune
Hamm revokes insurance agent’s license
BISMARCK, N.D. (AP) — Insurance Commissioner Adam Hamm has revoked the license of a Stutsman County insurance agent.
Hamm says Kyle Cuypers failed to disclose criminal convictions on his insurance producer license application last February.
Hamm says Cuypers consented to losing his license and waived his right to a hearing. Cuypers did not immediately return a telephone call Wednesday seeking comment.
Hamm says Cuypers reported to the department in November that he had been convicted of driving under the influence the month before, and the department subsequently learned that Cuypers had been convicted in previous years of making false reports to law enforcement and fleeing police.