Public hearings scheduled on insurance rates
HELENA — Commissioner of Securities and Insurance Monica J. Lindeen will hold two public hearings in the next couple of weeks to gather comments on rate increases that range from 3 percent to 62 percent proposed for 2017 for individual and small group health plans.
While the hearings are the result of a law the Legislature passed in 2013 that requires the companies to provide information, the state has little or no clout to lower or raise them.
The state’s 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.
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.
This is the first time the hearings have been held under the new law, officials said. In previous years, proposed rate increases were posted on the commissioner’s website and Montanans could comment online.
“It’s important that insurers show the reasoning behind their requests and hear from the public about what the rates could mean for Montanans and their pocketbooks,” Lindeen said.
The Affordable Care Act requires that insurers planning to significantly increase plan premiums submit their rates to either the state or federal government for review, said Laura Parvey-Connors, communications director for the state Securities and Insurance Department.
The hearings, during which the three insurers will present their rate justifications individually, will begin 9 a.m. Tuesday at the Scott Hart Auditorium, 302 N. Roberts St. in Helena. The second hearing will be 9 a.m. to 4 p.m. Aug. 3 in Room 148 of the library at Montana State University-Billings, 1500 University Drive in Billings.
Public comment will be accepted at the hearing and online at www.csimt.gov through Aug. 5. A final determination on the rates will be announced by Aug. 19.
The law lets the commissioner review the factors the insurers use to set the rates, but does not give the state the power to reject the rate increases or prevent them from going into effect.
However, the insurer can voluntarily lower the rate increase or the commissioner can issue a statement saying the rate increase is unjustified.
“Typically, we try to work with the insurance company to negotiate rates with them,” Parvey-Connors said.
She said they can voluntary reduce the rate, but at the end of the day it’s their decision. However, the commissioner can take measures such as issuing a statement calling the new rates unreasonable and urge consumers to shop around.
There are about 80,000 Montanans who buy individual plans, officials said. Those who buy insurance through healthcare.gov and receive a premium tax credit will not be significantly impacted by the proposed rate increases because the tax credit caps the amount of premium they are required to pay. Lindeen said about 35,000 Montanans in that market do not receive the tax credits and could experience the full impact of rate increases.
In their new rate requests, 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.
PacificSource stated it anticipated a 7 percent increase in medical service and pharmacy costs. The company also noted $37.2 million in premium income while having claims of $48.5 million.
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, John Doran, a spokesman for Blue Cross Blue Shield, told The Associated Press.
For every $1 received in premiums, the company incurs $1.40 in costs, he said.
House Bill 87 was sponsored during the 2013 legislative session by Rep. Jeffrey Welborn, R-Dillon.
He said he reasoned there were already rate reviews for life and auto insurance rates, but none for health.
“If nothing else, it kind of … makes the insurance companies pass the red-face test and increases transparency,” he said. “I think it’s always good when the public has the chance to participate in the process in any matter.”
“It helps us at the Legislature to crank out a better product,” he said.
Welborn said he wasn’t dissuaded that the insurance companies could do whatever they wanted despite public opposition.
“We do know what the result will be by doing nothing,” he said. “With the insurance companies it has to start somewhere and that’s a reasonable approach.”
Earlier this month, Lindeen said the number of medically uninsured people in Montana dropped from 15 percent to 7.4 percent over the past year. Officials credited Medicaid expansion in the state as well as stronger enrollment in the federal Affordable Care Act for the decrease.
Lindeen estimated that 957,000 Montanans now have health coverage, while 76,000 remain uninsured.
The Associated Press contributed to this story.
To be heard
Commissioner of Securities and Insurance Monica J. Lindeen will have a public hearing 9 a.m. to 4 p.m. Tuesday on the rate requests in the Scott Hart Auditorium, 302 N. Roberts St., Helena. The public may attend.
Lindeen will host a second public hearing on the rates Aug. 3, in Room 148 of the library at Montana State University Billings, 1500 University Drive in Billings.
According to the agenda, public comment will begin at 2:30 p.m. on both days.
Public comment will be accepted at the hearings and also online at www.csimt.gov though Aug. 5. A final determination on the rates will be announced by Aug. 19.