Why Insurance Premiums Rise

Every year it seems we spend more of our hard-earned money on health care, including insurance premiums. For most of us, the upcoming year will be no different.

How your rates are determined
Insurance premiums are a direct reflection of the actual costs of covering for those who are enrolled. In North Dakota, rates are set by the North Dakota Department of Insurance based on analyses of:

  1. How much health care is used by policy holders
  2. The cost of that care 
  3. Expenses for administering the health insurance

The analysis shows BCBSND members are using more health care services than ever before. At the same time, the cost of those services—things like tests, prescriptions, hospital stays, etc.—is higher than ever before. When usage and the costs rise, so do premiums.

The only part of the equation in which costs have held steady is in the cost of administering your plan. BCBSND 2017 administrative expenses are currently 9 percent—less than most insurance companies in the nation.

What we’re doing to curb costs
Keeping administrative costs low is not all we’re doing to curb rising prices. BCBSND has a range of initiatives underway to enhance prevention, wellness, care coordination and care management to ensure people receive the right care at the right time. Keeping patients well and helping them manage long-term medical conditions means healthier individuals and helps reduce costs.

Our goal is to make sure that people have access to affordable, quality health insurance. When you purchase an insurance policy, you are buying the security of knowing funds will be available to cover your eligible claims. That’s a job we don’t take lightly. Part of that responsibility is to collect enough in premiums to cover the entire group. Given the increases in member usage and soaring medical costs, a rate increase is necessary to ensure funds will be available.

For a more in-depth look at the nation’s health status, see the National Health Index (hover for data on your county). 


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