Companies announce new rates for health insurance

HELENA (AP) — Two companies have increased their health insurance rates for Montana after the president ended subsidies for low- to moderate-income policy holders under the Affordable Care Act.

PacificSource will raise its monthly premiums by an average of 13.1 percent, compared to the 7.4 percent submitted when the cost-sharing reduction payments, known as CSRs, were in place, state Auditor and Insurance Commissioner Matt Rosendale said Thursday. The Montana Health Co-op premium increase went from 4 percent to 16.6 percent.

Rosendale said he was frustrated and disappointed that PacificSource and the co-op raised their rates, saying “both companies had assured me that they would have been able to honor their prior rates, even if CSR’s were not paid. The companies will now have to answer to their customers for their reversal in that assurance.”

About 63,800 Montanans buy health insurance on the exchange with about 25,000 receiving benefit from the subsidies, Lee Newspapers of Montana reported.

When President Donald Trump announced last week he was ending the of the subsidies, Montana Health Co-op CEO Jerry Dworak said the co-op could not afford the more than $30 million loss it would take in 2018 and could end up in receivership if it were not allowed to revise its rates or leave the state marketplace.

The co-op expects to lose $8 million this year with the end of the subsidies that allow insurers to sell policies that carry lower co-payments and deductibles.

Todd Lovshin, vice president for PacificSource, told the Great Falls Tribune it would have been questionable as to whether it could have participated in the market without the revised rates.

Initially, the U.S. Center for Medicare and Medicaid Services said Montana companies could not re-file their rates based on the loss of the subsidy.

Rosendale said on Oct. 13 that he would hold the companies to the rates they submitted. However, a state law allows insurers to revise their rates to reflect any “material change” to the previous rate filing, as long as the changes are filed at least 60 days before they would take effect. Legal analysis by the auditor’s office determined the loss of the subsidies constituted a “material change.”

The insurance commissioner’s office does not have the legal authority to deny the rate increases, Rosendale said in a statement.

Federal regulators reversed their decision Monday and said Montana companies could file new rates.

The rate increases affect the silver-level health insurance plans on the individual market and go into effect on Jan. 1. Federal subsidies for low-income consumers remain intact and will offset some of the increases, Rosendale said. Open enrollment begins on Nov. 1.

Blue Cross and Blue Shield of Montana’s average premium increase remains at 22.3 percent. The insurer had submitted its 2018 rates based on the possibility that the cost-sharing reduction payments would be eliminated.