North Dakota Based Obamacare Exchange Contractor Projects Millions In Losses

I’ve written about Blue Cross Blue Shield of North Dakota subsidiary Noridian and their involvement with Maryland’s botched attempt at building a state-based Obamacare exchange previously. It appears as though the Maryland situation is having a big impact on the company’s bottom line.

So much so that North Dakota Insurance Commissioner Adam Hamm is watching the situation, and warning that losses from Maryland aren’t going to translate into price hikes for North Dakota insurance customers. Which is probably why BCBS pulled out of North Dakota’s Medicaid expansion, saying they were “unable to assume the financial risk.”

FARGO, N.D. – North Dakota insurance regulators are keeping an eye on a potentially costly legal dispute involving a subsidiary of Blue Cross Blue Shield of North Dakota.

In a recent quarterly statement, Noridian Mutual Insurance Co., which does business as Blue Cross Blue Shield of North Dakota, disclosed that an unidentified wholly owned subsidiary faces projected losses of $17.8 million.

Noridian Healthcare Solutions, which provides software for government and industry, is a wholly owned subsidiary that is entangled in a federal lawsuit with a former subcontractor involving the health insurance exchange for Maryland the two firms built.

“We’re monitoring the situation,” said Adam Hamm, North Dakota’s insurance commissioner, adding that his chief financial examiner is in frequent contact with Noridian and Blue Cross Blue Shield of North Dakota.

“He has been in almost daily contact with the Blues for a number of weeks now on this issue.”

Because regulators are performing an examination of Noridian, Hamm said he could not comment in detail about any possible financial concerns.

Hamm did say, however, that any costs or losses Noridian is incurring from the Maryland exchange and litigation would not be allowed as costs covered by health insurance premiums paid to Blue Cross Blue Shield.

Noridian and a subcontractor on the project are suing one another, with the subcontractor claiming that the North Dakota company had a “lack of relevant expertise” in building an online insurance exchange. Some have also claimed that Noridian was better at the political games needed to land such a contract than actually providing the services required by the contract.

BCBS, Noridian’s parent company, owns about 85% of North Dakota’s private insurance market, so if there are price hikes as a result of the Maryland fiasco, there are a lot of North Dakotans who will feel them.