Blue Cross Competitor Sanford Gets OK to Sell Insurance in ND

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North Dakota regulators have given approval to Sanford Health Plan to sell health insurance in the state, likely setting up competition with the company that has dominated the North Dakota market for decades but has drawn recent criticism for its spending practices.

Insurance Commissioner Adam Hamm said Sanford, which has headquarters in Sioux Falls, S.D., still needs to get its insurance products and rates approved.

“This is good news for North Dakotans as they will soon have another option when it comes to purchasing individual and group health insurance,” Hamm said. “Competition is critical to ensuring the highest quality of products at affordable prices. We welcome Sanford Health Plan into the market.”

Sanford Health Plan is a subsidiary of Sanford Health, which merged with Fargo-based MeritCare late last year, forming the nation’s largest not-for-profit rural health care provider. The new system, called Sanford Health & MeritCare, covers 130,000 square miles, including parts of North Dakota, South Dakota, Minnesota, Iowa and Nebraska.

Only a dozen companies sell individual and group health insurance policies in North Dakota.

Blue Cross Blue Shield of North Dakota has a state market share of almost 90 percent as measured by premium dollars. Spokeswoman Denise Kolpack said Blue Cross is committed to continuing to provide the best value for its 455,000 customers and has history on its side.

“We’ve provided good value with exceptional service for 69 years,” she said.

The spending practices of Blue Cross Blue Shield of North Dakota came under scrutiny last year after the insurer financed a Cayman Islands trip attended by more than 30 salespeople and guests. The fallout led to the firing of company president Mike Unhjem, who was paid $2.2 million in severance benefits.

State insurance examiners found what they said were excessive expenses paid with policyholders’ dollars. Hamm ordered the company to make changes.

Acknowledging the criticism, Kolpack said the insurer is “moving forward” and focusing on efforts to help lower medical inflation and enhance preventive care and wellness offerings.

“We need to continue to do what we can to be attractive to our customers,” she said.

Ryan Bohy, chief administrative officer of Sanford Health Plan, said he does not think the criticism of Blue Cross will be a factor in selling policies in North Dakota.

“It really comes down to the products and services that end up being on the table,” he said. “We’ll put something in the marketplace that we’re comfortable with.”

Bohy said officials expect to get approval of their rates and products within about two months. Sanford Health Plan already is seeking agents in North Dakota to sell policies, he said.

The Sanford Health Plan, which has been offering health coverage since 1998, has 110 employees serving South Dakota, northwest Iowa and southwestern Minnesota. It covers 64,000 people, including policyholders in the three states and MeritCare employees in North Dakota.