Bismarck Tribune - North Dakota News - Blues say underwriting loss may top $20 million

Blues say underwriting loss may top $20 million

May 24, 2008 - 04:06:02 CDT

FARGO (AP) - Blue Cross Blue Shield of North Dakota says it may face an underwriting loss of about $22 million - the largest in 10 years - when its fiscal year ends Dec. 31. The loss represents the difference between premiums it collected and claims expenses paid.

Blues Chief Executive Officer Mike Unhjem said the state's largest private insurer had budgeted for an underwriting loss of $15 million but claims have been rising faster than expected.

The projected loss is "not a crisis ... but it's serious," he said.

Insurance companies have other sources of income, primarily from investments. But Unhjem said the loss might force the insurer might be forced to trim reimbursements to health care providers.

Blues executives met Wednesday with representatives of the state's largest health systems - MeritCare in Fargo, Altru in Grand Forks, and Medcenter One and St. Alexius in Bismarck.

Blues spokeswoman Denise Kolpack said the underwriting projections are not final and no decisions have been made.

"We truly are still analyzing all the numbers," she said Friday.

Blue Cross Blue Shield of North Dakota budgeted for health care inflation of 9.5 percent, but costs have been rising by more than 11 percent over the past year, Unhjem said.

Last year, the Blues sought a 17.3 percent increase in premiums for individuals. The state Insurance Department approved a 9.9 percent increase for the fully insured group rate.

In 1998, Blue Cross Blue Shield of North Dakota reported an underwriting loss of nearly $27 million. The insurer responded then with a hiring freeze, and 57 employees took an early retirement option, Kolpack said. The Blues also reduced reimbursements to health care providers by a little less than 1 percent, and imposed a 6.3 percent rate increase, she said. Forty-five jobs were cut but 35 of the workers in those jobs were able to transfer within the system.

"This time, we are recognizing these trends earlier so we can take corrective action earlier. In 1998, it was pretty late in the year when we knew the numbers," Kolpack said.

Unhjem said hospital officials have said cuts in reimbursements could force them to cut services in already tough financial times.

"That was the message that we got loud and clear," he said.

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Comments

big blues wrote on May 28, 2008 5:59 PM:

" The lost is the pension and payroll of these executives. Look at the building they built in Fargo. What a scam!!!!!!!!!!!!. Insurance premiums up again. Congress wake up!!!!!!!!!!!!!. Also the BLUES need to wake up "

Heritage wrote on May 24, 2008 4:28 PM:

" Have Unjhem give up part of his $460,000+ salary and the 26% bonus (ooops they call is PAR, but in all reality its a bonus). Then cut down on the VP's and Managers and Teamleaders and Supervisory - too top heavy. That will help but it won't happen because mgmt and the board will take care of themselves first. "

WSI Effect wrote on May 24, 2008 11:36 AM:

" Isn't it funny that this acticle comes merely hours after WSI announces that they are considering sending $74M back because they have too much money? I think that Blue Cross should send a bill to WSI for the money that they're losing. "

The Reason wrote on May 24, 2008 9:55 AM:

" Blue Cross is losing money because they are paying claims that WSI is wrongfully denying. This problem can be fixed. "

middle class wrote on May 24, 2008 9:05 AM:

" If Blue Cross is losing money, one of two things has to happen. They either have to take more money in or pay less money out. It is not fair to raise everyones premeums, due to an excessive amount of claims being filed by a small portion of people. The fair thing to do would be to raise everyone's deductables, until the company starts showing a profit again. Before this happens the company should go through an audit and if needed, be forced to curtail its internal operating expenses. "

tired of insurance wrote on May 24, 2008 8:01 AM:

" I can see another insurance rate increase coming my way! The last increase from the Big Blue was $100.00 a month, and I am only 1 policy holder. I have very few claims but seem to be paying more and more regardless. I'm beginning to think no insurance would be better. Who can afford another increase, NOT ME. "

Gambling Insurance wrote on May 24, 2008 6:57 AM:

" When you underwrite insurance, you gamble your projected costs will be covered by premiums and investments. You have an OBLIGATION to pay your bills as negoiated, no 'do overs' at the casino, no 'do overs' for you. Fire a cuple of executives to make your nut. The State's "Blues" Blues as merely another agument in favor of single payer health care. "

victim wrote on May 24, 2008 4:42 AM:

" My wife has paid into The Big Blue for ten years. We had insurance on the family. The got to old to be on the policy. But, Big Blue all of a sudden figures that I am not covered. This is right after my doctor had run test and found out I have fiybromyalgia. I have tried to ge information form the ND Isurnace Commission. But, seem to not want to answer my emails. Firgures the Big Blue has a grip on the State Goverment. These most likely will not get printed the Tribe would not have to get the Big Blue mad. "

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