Health law uncertainty balloons Montana insurance rates

Not knowing what Congress and President Donald Trump will do with health care has led Montana's largest insurer to propose a rate hike for next year that's 10 times higher than it would have otherwise, company officials said Wednesday.

Blue Cross and Blue Shield of Montana is requesting an average 23.1 percent rate hike for individual plans purchased under the Affordable Care Act, which would be its third consecutive double-digit premium increase since the federal health exchange came into existence.

If Blue Cross knew that the Obama-era health care law's provisions would be in place next year, the company would have only requested a 2.3 percent rate increase, President Mike Frank said during a hearing on the proposed hikes.

"There's a lot of uncertainty still out there, so we took the approach of how to price for that," Frank said.

Insurers across the nation are trying to guess what Congress will do as they face state deadlines to file their 2018 rates. Some, like Blue Cross, are hedging against setting rates that could turn out to be too low if Congress comes up with a new law that drives up costs.

Others, like the Montana Health Co-op, filed rates assuming the Obama health law will be in place next year. The Montana co-op set a 4 percent average increase for its individual plans.

"If the Senate comes out with anything this week, it could change the game," Larry Turney, president and chief operating officer.

The third Montana insurer offering Affordable Care Act plans is proposing a 7.4 percent increase for its individual plans. PacificSource also is assuming no changes to the health law.

The Republican-led Congress has struggled in its efforts to repeal Obama's health care law, even as Trump has increased the pressure on the Senate to do so. The Senate on Tuesday voted against one replacement bill and on Wednesday rejected another version to repeal the existing law while giving lawmakers two years to craft a new one.

Blue Cross and Blue Shield of Montana officials cited two Affordable Care Act provisions that would be particularly costly to insurers if they were repealed or no longer enforced. They are the mandate that requires individuals to purchase coverage and cost-sharing reductions that provide federal subsidies to help lower the price of premiums and deductibles.

About 58 percent of people nationwide with an Affordable Care Act plan receive those cost-sharing reductions, according to the Kaiser Family Foundation. Premiums would have to rise an average 19 percent to make up for their loss, the foundation said in a report released in April.

Commissioner of Insurance and Securities Matthew Rosendale, who presided over Wednesday's hearing, appeared to misunderstand Blue Cross' explanation for its rate increase. He told The Associated Press afterward that he believed the essential health benefits that the Affordable Care Act requires to be covered were driving the increases.

Blue Cross spokesman John Doran had no comment on Rosendale's interpretation and said the company stands by Frank's explanation.