Insure Montana Premiums Could Go Up 32%

Small businesses with state-subsidized health insurance through the Insure Montana program face double-digit race increases next year, officials said.

Blue Cross Blue Shield of Montana, the company that sells and underwrites the policies, has said it needs to increase premiums by an average of nearly 32 percent after an increase in claims this year.

“The premium is being driven by utilization” of health care services, Terry Cosgrove, executive vice president and general counsel for Blue Cross, said. “That’s just the way insurance works. We have to price it so it pays for itself.”

State insurance officials and the Insure Montana board say they’re looking at ways to reduce the proposed premium increase, possibly by cutting benefits.

“We’re not just going to say because Blue Cross says it’s 32 percent, that we start there,” said Gordon Higgins, deputy state auditor. “We need to take up all the variables that we have.”

“We think without making onerous benefit changes, we’ll be able to moderate the rate increase to the low 20s,” said Jim Edwards, a Helena health insurance consultant who sits on the Insure Montana board.

He also notes businesses can change their coverage from a “premier” plan to a “standard” plan, which increases deductibles and decreases the percentage of the remaining bill covered by insurance. He said such a move would lead to premium increases in the range of 10 percent to 13 percent.

The Insure Montana board of directors is meeting Monday in Helena to determine the final increase, which will take effect in January.

The 785 businesses buying insurance through Insure Montana must choose this year whether to renew their policies. Insure Montana subsidies are also available for health insurance sold by several business associations, such as the Montana Chamber of Commerce, but so far all the eligible businesses are purchasing insurance from Blue Cross.

Insure Montana, created in 2005, offers subsidized health insurance to small businesses that previously had no insurance for employees, and tax credits to businesses that already provided coverage. The program is financed by a voter-approved, $1-per-pack increase in cigarette taxes that went into effect in late 2004.

The insurance pool, which covers about 5,500 people, has had several expensive claims for premature babies, said Connie Welsh, another Insure Montana board member.

Welsh, administrator of the state Health Care and Benefits Division, said new insurance pools sometimes have big fluctuations in rates, because it’s hard to accurately predict the initial level of claims.

The Insure Montana board has asked Blue Cross for a plan to manage potential high-cost claims for births to keep those costs down in the future.