In a reversal from last week, two Montana health insurers will be allowed to adjust their 2018 rates on individual policies, to reflect the Trump administration’s decision to end multimillion subsidies for many of those policies.
State Auditor and Insurance Commissioner Matt Rosendale announced the change Monday, saying federal health officials had reversed a decision Friday that said the companies couldn't refile their 2018 rates.
Both companies – PacificSource and the Montana Health Co-op, which insure about 36,000 people with individual policies in Montana – told MTN News they’re refiling rates as soon as possible for the affected 2018 policies.
“This will allow us to be (on a) level playing field and be in the marketplace,” said Todd Lovshin, vice president for PacificSource in Montana. “Montana has been fortunate in that it’s kept its three original insurers within that marketplace, so I think competition is really healthy for this market.”
Both companies said they’ll likely ask to increase rates on policies whose costs have been offset by the subsidies, which are being canceled for 2018.
The third company selling polices in Montana’s individual market – Blue Cross and Blue Shield of Montana – had already filed an average 20 percent increase for its policies, anticipating possible changes by the Trump administration.
Blue Cross insures about 32,000 Montanans with individual policies.
PacificSource and the Co-op had filed for average increases of 7.4 percent and 4 percent, respectively, for 2018 policies – but based those increases on the assumption that federal policy and law would be unchanged.
The rates are for individual health-insurance policies sold primarily on Montana’s “Obamacare” online marketplace, for people who don’t have access to group policies through their employer. Enrollment for the policies for 2018 begins in just two weeks.
The Trump administration announced last Thursday it will end subsidies to insurers that pay for out-of-pocket discounts for policyholders earning less than 250 percent of the federal poverty level, or about $30,000 a year for an individual.
The Trump administration said the subsidies weren’t authorized by Congress and had been paid illegally by the Obama administration since 2014.
U.S. House Republicans challenged the payments in court and a federal court ruled last year that the payments weren’t properly authorized. That decision has been on appeal.
Other federal subsidies that offset the premiums for these policies remain in place. Those subsidies are available to most people earning up to 400 percent of the federal poverty level and are paid to about 85 percent of Montanans buying these policies.
Rosendale, a Republican and outspoken opponent of the Affordable Care Act (“Obamacare”), said any changes in 2018 rates from the Co-op and PacificSource will likely increase the premiums for the affected policies.
He cautioned consumers to carefully review their options before renewing their 2018 policies.
“I am extremely disheartened by these last-minute actions of both PacificSource and Montana Health Co-op,” Rosendale said in a statement. “My department was advised by both companies just months ago that with or without the (cost-sharing reduction) payments, they would be able to honor the rates they provided to us and the public.”
But the companies told MTN News that they had informed Rosendale that they might need to adjust their rates if federal law or rules changed – and that Rosendale had offered in August to work with the companies if circumstances changed.