Health insurance exchange may bring competition to North Dakota

North Dakota Health Insurance
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North Dakota Health InsuranceNorth Dakota may see more competition in market due to health insurance exchange

Many states throughout the U.S. are still struggling over the concept of health insurance exchanges. The exchanges are part of the Affordable Care Act, which many states oppose on general principle. As it becomes less likely that states will be able to avoid the federal health care law, however, some are beginning to highlight the potential benefits that could be had through hosting a health insurance exchange. In North Dakota, lawmakers expect that a comprehensive exchange program will lead to a dramatic increase in competition within the insurance industry.

State officials predict marked increase in competition

Competition in the insurance industry has a similar effect to that found in other industries. Competition effectively lowers the prices of products as businesses work to attain the favor and loyalty of consumers. In health insurance, more competition typically means lower rates and, in some cases, better benefits. North Dakota has long been infamous for its lack of competition, especially in the health market, as the state is all but dominated by Blue Cross Blue Shield.

Effects of the exchange are as yet unclear

Rebecca Ternes, Deputy Commissioner of the state’s Insurance Department, notes that it is not yet clear whether a health insurance exchange will boost competition in the state’s market. The exchange is meant to sell policies from private companies, making them available through a unified marketplace platform. The best policies suited to a consumer’s particular needs are meant to be sold to any given person, but many consumers will often favor the least expensive coverage they can find for financial reasons. While the exchange would provide an atmosphere that foster competition, it is not clear how private insurers will respond to the existence of the exchange.

Federal government to be responsible for North Dakota health insurance exchange

North Dakota will not operate its own health insurance exchange. The state has opted to pass this burden to the federal government, which will also be responsible for building the exchange. The federal government will tailor a health insurance exchange for the state based on data representing the nationwide health insurance market. As such, some state officials have shown concern that the exchange will not be accommodating to the needs specific to the North Dakota market.

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