Insure Montana May Cut Benefits to Reduce Premium Increase

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The board that oversees a subsidized health-insurance plan for nearly 800 small businesses in Montana indicated it will try to hold down premium increases by cutting plan benefits.

Jim Edwards, a member of the Insure Montana board, said increases that take effect in January could range from 9 percent to 13 percent, depending on the plan businesses choose.

Blue Cross Blue Shield of Montana, which sells the health insurance to the 785 businesses in the state-subsidized “pool,” has said a 32 percent increase is needed to cover the plan’s current benefits.

The board asked Blue Cross officials to price two similar plans with lesser benefits, and may decide later this week which plans to offer in 2008.

Board members said Monday they’ll likely choose to eliminate the more expensive “premier” plan offered by Blue Cross, keep a lesser plan called the “standard” plan, and create a new plan with lesser coverage. The standard plan also may have its benefits improved slightly, board members said.

Insure Montana, which has $6.6 million this year to help subsidize group health insurance for small businesses, must notify businesses in the pool by Nov. 1 of any 2008 rate changes.

Board members and state officials on Monday asked Blue Cross executives to explain the need for such a large increase.

Anna Whiting-Sorrell, Gov. Brian Schweitzer’s top adviser on health issues, wanted to know how a sophisticated health insurer like Blue Cross could have no rate increase last year and say now that a 32 percent increase is needed for the same policy.

Blue Cross officials said the cost of the pool insurance has increased because of some large individual claims, such as four premature babies that cost $200,000 each, a tripling of enrollment in the past year, and the fact that some of the people insured have reached the end of a yearlong period where pre-existing health conditions weren’t covered.

Insure Montana was created in late 2005, funded by new tobacco taxes that were approved by Montana voters in 2004. About 5,500 people are insured by policies purchased with subsidy help.