HELENA — The three health insurers selling individual policies in Montana through the online marketplace created by President Barack Obama’s Affordable Care Act are proposing large premium increases for the second straight year, state officials said Friday
The largest insurer, Blue Cross Blue Shield of Montana, is proposing an average 62 percent rate increase for its individual plans for 2017. Montana Health Co-op’s average requested increase is 22 percent, and PacificSource’s request is an average 20 percent jump.
Last year, the three companies also requested and enacted double-digit rate increases.
In their new rate requests, released by Commissioner of Securities and Insurance Monica Lindeen, all three companies report paying more in claims than taking in premiums in 2015. They also cite rising costs and the elimination of the federal reinsurance program as justifications for the hikes.
After analyzing two years’ worth of data since the Affordable Care Act took effect, insurance companies found that people who enrolled used far more medical and pharmaceutical services than had been anticipated, said John Doran, a spokesman for Blue Cross Blue Shield.
For every $1 received in premiums, the company incurs $1.40 in costs, he said.
“We cannot continue to lose this amount of money,” Doran said. “That is not sustainable. We want this marketplace to work in the long term, but it has to stabilize.”
Lindeen has scheduled a public hearing on the proposed rate increases for July 26 in Helena.
“More Montanans have health coverage than ever before, and there are many health plan choices,” Lindeen said in a statement. “But it’s important that we take a close look at these plans to make sure their prices are reasonable and justified.”
The rate increases would not be as high for the 85 percent of Montana enrollees who qualify for tax subsidies to offset the cost of their insurance. About 35,000 people in Montana do not receive tax credits, and they would feel the full brunt of the increases, Lindeen said.
Republicans who opposed Obama’s health-reform law blasted the proposed rate hikes.
“We predicted this from the beginning,” said state Sen. Fred Thomas, R- Stevensville. “This is the tipping point.”
Besides, the individual plans, the three insurance companies are also proposing premium rate hikes for the small group plans they sell in the state.
Blue Cross Blue Shield is requesting an average rate increase of 32 percent for its small group plans, while PacificSource’s request is for 6.5 percent and Montana Health Co-op’s is for 3 percent.