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Patrick Springer, Published October 24 2009

Blues face loss of two large health systems

Blue Cross Blue Shield of North Dakota could lose 18,900 enrollees if two large health systems switch to rival health insurance firms.

Altru Health System, based in Grand Forks, N.D., is dropping Blue Cross Blue Shield and moving to Medica, effective Jan. 1, for approximately 2,700 employees. Counting dependents, it has 5,900 members.

An even larger loss is likely if Fargo-based MeritCare’s planned merger with Sanford Health is approved as expected, and Sanford’s health plan becomes available in North Dakota and northwest Minnesota.

MeritCare, which has about 7,000 employees, has a benefit plan that covers about 13,000, including dependents.

“The decision will be made when the merger is completed,” MeritCare spokesman Darren Huber said, adding that no major changes in employees’ benefit plan would result.

Even if both health systems leave, Blue Cross Blue Shield’s position as North Dakota’s dominant health insurer remains secure. It collects almost 90 cents of every premium dollar, and directly or indirectly covers more than 475,000 people.

Denise Kolpack, vice president for communications at Blue Cross Blue Shield, said the enrollment losses would not result in layoffs at its Fargo headquarters or premium increases for other groups.

Altru’s decision to switch to Medica, a health insurer based in Minnetonka, Minn., that covers 1.4 million, was a close call, said Jeff Franck, the system’s compensation and benefits manager.

“It really came down to a value call,” he said. Altru concluded that Medica provided more for its employees in its wellness, smoking cessation and 24-hour nurse’s hot line services, Franck said.

Price wasn’t a major consideration, although co-pays under Medica’s plan were more competitive, but premiums generally will not be reduced, he said.

Still, Franck added, “It’s a better deal for employees.”

Medica now provides coverage for about 15,000 members in employee groups in North Dakota.

“Altru was certainly one of the bigger moves recently,” said Larry Bussey, Medica’s director of communications. “Obviously, we’re hoping to continue to provide groups of all sizes with coverage alternatives.”

MeritCare and Sanford Health, based in Sioux Falls, S.D., hope to complete a merger later this fall.

The North Dakota Attorney General’s Office still is reviewing the proposed merger, a spokeswoman said. Similarly, state insurance regulators still are reviewing the application by Sanford’s health plan to enter the North Dakota market.

For it’s part, Blue Cross Blue Shield said it will strive to make up for the lost employer groups.

“As with any lost business, we are disappointed Altru has decided to leave our coverage,” said Chad Niles, the Blues’ senior vice president of marketing. “We will work diligently to keep our relationship active and to try to bring the business back to us as soon as possible.”

If MeritCare’s expected merger with Sanford goes through, Blue Cross Blue Shield acknowledges it likely would lose that business.

“We realize the loss of the MeritCare employees group is almost inevitable due to their merger with the Sanford system,” Niles said.

“We are not happy with the enrollment loss of either group, now or in the future, but will seek to fine ways to remain creative and efficient and regain lost customers and membership as quickly as we can by living up to our mission of providing the best value in health insurance.”

Readers can reach Forum reporter Patrick Springer at (701) 241-5522