MONTANA – Governor Steve Bullock today announced approval of Montana’s reinsurance waiver by the Center for Medicare and Medicaid Services (CMS) to lower healthcare premiums and bring stability to the market.
“We are taking action for the Montanans who purchase insurance on the individual marketplace and have been burdened by unaffordable health care costs due to federal inaction,” Governor Bullock said. “The Montana reinsurance program will lower insurance premiums, make it possible for more Montanans to enroll by driving down costs, cultivate greater certainty in the market and protect consumer’s choices.”
The approval of the waiver will allow the state to create a reinsurance program that will reimburse costs for high-cost claims, so those claims won’t factor into individual marketplace premiums in the next year. Studies estimate the reinsurance program could lower premiums by up to 9 percent in Montana. Lower rates would mean more people could enroll in coverage. Offsetting the costs of high claims for insurance companies could reduce volatility and stabilize the market.
In May, Governor Bullock signed Senate Bill 125 that authorized Montana to apply for a State Innovation Waiver from the federal government. The bill was drafted by the working group established by Governor Bullock that included the Governor’s Office, the Montana Department of Administration, legislators, the Office of the Montana State Auditor, and representatives from insurance companies who sell on the individual marketplace.
The waiver was submitted in partnership with the Montana Healthcare Foundation, which provided data analysis showing that reinsurance programs insulate insurers from very high claims and save consumers money.
The new rates will take effect in Montana in January of 2020.