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New Law Could Reduce Health Insurance Premiums For 50,000 Montanans

Average Monthly Premiums for Second-Lowest Cost Silver Plan in Montana 2016-2019.
Data from: Centers for Medicare and Medicaid Services,
Average Monthly Premiums for Second-Lowest Cost Silver Plan in Montana 2016-2019.

Health insurers say premiums on the individual market could drop between 10 and 20 percent once a new bill is signed into law. The Montana Reinsurance Association Act is expected to be signed by Gov. Steve Bullock later this week.

The bill creates a new pool of money to help health insurers cover the cost of high ticket claims for health care.

Richard Miltenberger, the president of the Montana Health Co-Op, says those costs can change from year to year.

"By taking away the risk of the very largest claims it enables the insurance companies to be less gambling, if you will, in this marketplace."

When insurance companies don’t have to gamble on paying out unpredictable amounts of expensive health care claims they can lower their premium costs.

Montana Health Co-op is the largest provider of health insurance on the individual market in the state. Senate Bill 125 requires the co-op, and the two other large insurers on the individual market, Blue Cross Blue Shield and PacificSource, to pay into the new pool of money to help cover the cost of large health claims.

The federal government also adds money into this pool and pays for a majority of the costs.

Miltenberger says the more than 50,000 people on the individual marketplace in Montana are impacted by new policy, not people receiving coverage from their employer.

The bill passed out of the Legislature with little opposition while receiving backing from Republican State Auditor Matt Rosendale and Democratic Gov. Steve Bullock. However, Miltenberger says the policy won’t keep health care costs from rising.

"This is a tremendous program, we’re excited about it. But it really does not do anything to address the underlying cause of health care inflation. And so we've got to do something to hold down the cost of health care, otherwise the effect of this will be eaten up in a matter of two years."

That means, Miltenberger says, that while this policy may save people on the individual market 15 percent on their health insurance premiums, the overall cost of health care is still rising. So the savings may be temporary.

Gov. Bullock is expected to sign the bill into law Thursday.

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