Insurers propose reduced premiums for individual policies
HELENA, Mont. (AP) — The three Montana companies that offer health insurance policies on the individual marketplace are proposing reduced rates in 2020, in part because of a bill passed by the Legislature to help spread the risk of high-cost claims, State Auditor and Insurance Commissioner Matt Rosendale said Thursday.
This is the first year under the Affordable Care Act where all three companies selling individual policies in Montana have recommended a rate decrease.
Blue Cross and Blue Shield of Montana is proposing a 14.1% average premium decrease for the 19,500 people it covers, Blue Cross spokesman John Doran said Thursday.
PacificSource is proposing a 13.4% decrease for the 11,500 Montanans covered by its plans while the Montana Health CO-OP is proposing an average 8% premium cut for its 20,700 members, Rosendale said.
The health insurance rates will be finalized this summer and open enrollment begins in November.
A bill passed this year creates a reinsurance pool to help reimburse insurers for high-cost claims, ranging from $40,000 to $1 million, so those costs aren’t included in determining individual marketplace premiums for the following year. It will be funded with about $60 million in federal money that otherwise would have been used as premium tax credits and another $15 million raised through a 1.2% premium tax on all major medical plans sold in the state.
Blue Cross would have proposed a 6.7% premium decrease without the reinsurance pool, Rosendale said.
Democratic Gov. Steve Bullock vetoed a reinsurance bill passed by the 2017 Legislature, saying his administration was concerned that it did not meet the requirements to apply for a federal waiver.
Bullock and the Department of Administration created a work group to study the issue and it drafted the reinsurance bill for the 2019 Legislature. Rosendale supported the measure and earlier efforts to create a reinsurance pool.
In the small group market, where the reinsurance program does not apply, Blue Cross is proposing an average rate increase of 6.9% for 25,700 residents while PacificSource is proposing a 7.4% increase for 20,000 people.
The proposed rates do not affect Montanans who get their health care coverage through large employer or a government program.