Largest Montana Health Insurer Raises ACA Premiums by 55 Percent

Published December 21, 2016

The three companies offering individual health insurance plans on Montana’s Obamacare exchange are charging between 31 percent and 55 percent more, on average, for individual insurance plans in 2017 than they did in 2016.

For individual plans, Montana Health Cooperative has increased 2017 premiums by an average of 31 percent, and PacificSource has raised premiums by an average of 33 percent, reported in October.

Blue Cross-Blue Shield (BCBS), the state’s largest insurer, increased 2017 premiums for individual plans by an average of 55 percent, a slight reduction from the 58 percent average increase the company announced in August 2016, which the state insurance commissioner ruled “still unreasonable” under Montana’s rate review system after an even-higher previous projection.

The company initially projected premium increases averaging 65 percent. Monica Lindeen, Montana’s commissioner of securities and insurance, requested BCBS reduce its projected increase by at least 20 percent in an August 19 “Notice of Deficiency.” State law does not authorize the commissioner to reject insurers’ rates, according to the office’s September 14 press release.

Lindeen also asked Blue Cross to reduce its 32 percent projected average premium increase by 10 percent for small-group plans, which the company subsequently reduced to 29 percent.

Montana’s average premium increase for individual plans in 2017 exceeds the 25 percent national average premium increase for the second-lowest “Silver Plan” offered on the Obamacare exchanges, the benchmark plan the U.S. Department of Health and Human Services uses to track insurance prices.

Compounding Increases

The increases could pose “serious financial challenges” to the 35,000 Montanans who do not receive premium subsidies under the Affordable Care Act (ACA), according to the press release from Lindeen’s office.

State Rep. Tom Burnett (R-Belgrade) says rising ACA premiums compound year after year.

“These increases, on top of the past year’s 22–34 increases, are difficult for consumers and business as well as the taxpayers who pay to subsidize policies,” Burnett said.

The costly Obamacare premiums siphon precious resources from Montanans’ personal budgets, Burnett says.

“For tens of thousands of Montanans, paying soaring premiums will displace other spending, reduce standard of living, and require longer hours at work,” Burnett said. “Some will pay the onerous Obamacare tax penalty and go without insurance.”

Brent Mead, executive director of the Montana Policy Institute, says the premium increases make health insurance unaffordable for many Montanans.

“We are a state that ranks in the bottom five in the country in wages,” Mead said. “Montana families cannot afford to pay 50 percent more for their health insurance.”

Competition Lacking

Montana’s health insurance market suffers from a lack of competition, Mead says.

“It is important to note that Montana only has three companies subject to review in the small group and individual plan marketplace,” Mead said. “Montana is not a state with robust competition in the marketplace.”

State Auditor-elect Matthew Rosendale, currently majority leader of the Montana State Senate, says Montana’s unaffordable insurance reflects the shortcomings of the Obama-era national health care policy.

“I think that this exemplifies the problem with a nationalized health care system,” Rosendale said. “When you eliminate competition, you have mandated purchases. Then, obviously, it is a problem. We need additional health care alternatives for people to pursue.”

Mead says soaring Obamacare premiums reflect the ACA’s focus on reducing the number of uninsured people, not cutting health care costs.

“[The] proposed rate hike ranging reflects the economic realities of the Affordable Care Act,” Mead said. “The ACA did not address the underlying costs of care, namely provider costs and pharmacy costs, so as those costs continue to skyrocket, they will be reflected in insurance rates.”

Michael McGrady ([email protected]) writes from Colorado Springs, Colorado.

Internet Info:

Dustin Siggins, “Montana Underestimated Medicaid Expansion ‘Woodwork Effect,'” Health Care News, The Heartland Institute, May 2016.

Michael Hamilton, “Latest Excuses for Rising ACA Premiums Ring Hollow,” Consumer Power Report, The Heartland Institute, October 20, 2016.

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