Health care costs continue to increase
Health care costs have more than tripled from $75 billion in 1970 to a record $2.7 trillion in 2011. This rapid increase in health care costs has led to more expensive claims submitted to insurance companies, higher insurance premiums charged to members and bigger medical bills for millions of Americans.
Health care costs are the largest single driver of insurance premiums. Higher health care costs lead to higher premiums as insurers receive more expensive bills from hospitals and doctors' offices. Health insurance works by pooling risk. When you are sick, the other people in your pool or group help to pay for much of the covered health care services you receive.
While health care costs continue to rise, the rate of annual medical claims increases have slowed to about 4 percent per year the last two years. Health care experts are divided on the reasons for the slowing increases or if the trend will continue.
Health care costs in North Dakota are typically lower than those in other parts of the country, but we are looking for ways to make health insurance – and health care costs in general — more affordable for North Dakotans. We are beginning to reimburse the state's largest health care systems more based on quality and less on volume of services delivered. Our MediQHome program is helping doctors better manage care for patients with chronic conditions such as diabetes and high blood pressure.
North Dakota's health care system delivers high quality care, but we continue to advocate on the part of our members and all North Dakotans for increased affordability and transparency in medical billing. As a nonprofit, member-owned insurance company, we aren't motivated by profits. We have some of the nation's lowest administrative costs with 90 percent of member premiums used to pay for medical care.