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Montana provider says it will go broke without subsidy

in News
Outlaw Partnersby Outlaw Partners
October 16, 2017

By Amy Beth Hanson, Associated Press

HELENA,(AP) –  Two companies offering health insurance through the individual market in Montana cannot adjust their rates to take into account President Donald Trump’s decision this week to end federal subsidies for low- to middle-income workers, the state’s insurance commissioner said Friday.

Matt Rosendale said he will hold the Montana Health Co-op and PacificSource Health Plans to the rate increases they proposed, which average 4 percent for the co-op and 7.4 percent for PacificSource, unless he hears differently from the U.S. Center for Medicare and Medicaid Services. The rates were published earlier this week.

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“Any Montana consumer who purchases these products can be assured that my office verified that Montana’s insurers, whether receiving subsidies or not, are financially able to provide the benefits for the posted rates regardless of action taken at the federal level,” Rosendale said in a statement.

Jerry Dworak, CEO of the Montana Health Co-op, disagreed. He said that if the co-op isn’t allowed to update its rates or leave the state marketplace it will lose more than $30 million next year, in addition to the $8 million it would lose over the next three months with the end of the cost-sharing reduction subsidies.

“The threat of receivership is not because of mismanagement. It’s not because Obamacare is failing,” Dworak said. “The threat of receivership is because of a political game they’re playing to sabotage the whole Obamacare marketplace.”

Blue Cross and Blue Shield of Montana submitted premium increases of about 22.3 percent to account for the possibility of losing the subsidy and will be able to offer policies at the rate it submitted, said John Dornan, vice president of external affairs.

“We knew all along that even if the (Affordable Care Act) remained the law of the land there was no guarantee that the rules of the road would not change and that’s what we’ve seen this week,” Doran said.

Open enrollment starts on Nov. 1, and the rates and plans will take effect on Jan. 1. Blue Cross has 31,000 policyholders this year, the co-op covers about 20,000 and PacificSource has about 12,000 policy holders.

The Centers for Medicare and Medicaid Services said Friday that only the states where insurance commissioners said companies should assume in their proposals that the subsidies will be paid are allowed to submit updated rates.

“Unfortunately, based on this criteria it seems that Montana would not qualify,” Samara Lorenz with CMS wrote to Rosendale on Friday.

Montana didn’t offer any guidance with regard to rate submission, the companies said.

Todd Lovshin, the Montana regional director for Pacific Source, said they’re evaluating the impact of Trump’s decision and how they can best move forward.

“Our intent is to really work hard to take care of our members,” Lovshin said, adding that Trump’s order does not affect existing policies and members should continue to pay their premiums and seek the care they need.

Rosendale said the focus should be on the underlying problem of affordable health care. “Continuing to throw billions of dollars at insurance companies or turning our health care system over to the government as some would have us do is not a viable solution,” he said.

Gov. Steve Bullock said abruptly ending the subsidies is irresponsible and unnecessary. “Congress must take action to fund the cost-sharing reduction payments immediately and then start making a real effort to work with states to find real solutions to lower costs, stabilize the market and positively impact coverage and care,” he said.

Copyright 2017 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

 

 

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