END OF 2018 OPEN ENROLLMENT PERIOD (42 states)

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Montana: GOP Insurance Commissioner busted trying to frame insurance carriers?

Me, just under a month ago:

Things were looking pretty dicey for two of Montana's three insurance carriers participating on the individual market the past few days. One of the three, Blue Cross Blue Shield, saw the writing on the wall regarding Cost Sharing Reductions (CSR) likely being cut off and filed a hefty 23% rate hike request with the state insurance department. The other two, however (PacificSource and the Montana Health Co-Op, one of a handful of ACA-created cooperatives stll around), assumed that the CSR payments would still be around next year and only filed single-digit rate increases.

I'm not going to speculate as to the reasons why they both did so when it was patently obvious that having the CSRs cut off was a distinct possibility, although I seem to recall the CEO of the Montana Co-Op said something about their hands being tied since CSR reimbursement payments are legally required, after all. Basically, it sounds like he was genuinely trying to avoid passing on any more additional costs to their enrollees than they had to.

Of course, as it turned out Donald Trump did indeed lower the boom and cut off CSR reimbursement payments. Montana Insurance Commissioner Matt Rosendale's initial response? Too Bad, So Sad, Them's The Breaks, Tough Patooties, Kids:

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.

“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.

However, the reality is that having the CSR payments cut off without baking them into their 2018 rates would amount to a death sentence for at least one of the other two carriers:

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.”

The (relatively) good news is that several days later, Commissioner Rosendale backed off and allowed PacificSource and the Montana Co-Op to tack the missing CSR payments onto their 2018 rates after all. The Co-Op is still being screwed out of about $6 million for the last 3 months of 2017, but at least they won't have to go deep into debt for the full 12 months of 2018.

However, this still leaves the question of why they (and PacificSource) didn't see the CSR cut-off coming a mile away and plan to submit higher 2018 rates if necessary in the first place?

Well, it turns out that apparently...they did:

Montana commissioner chides insurance companies for raising rates, despite earlier offers to help

BOZEMAN — Montana's insurance commissioner chided two companies for raising rates on health insurance policies offered under the Affordable Care Act after federal subsidies ended, despite earlier telling them they could modify their rates if circumstances changed, the Bozeman Daily Chronicle reported.

...Matt Rosendale said he was "extremely disheartened" that PacificSource and the Co-op increased their premiums, adding that he had been assured by the companies that with or without the cost-sharing reduction payments they would be able to honor the rates they first submitted.

However, the Chronicle, through a Freedom of Information Act request, obtained letters Rosendale wrote to the companies in August saying that his office was aware of the uncertainty surrounding the Affordable Care Act and he would work with them to "ensure rates are modified to address new circumstances."

So it appears that Rosendale basically set the insurance carriers up: In August he told them to go ahead and submit lower rates because he was confident the CSR payments would continue, and even if they didn't, they could cross that bridge when they came to it...and then tried to throw them off the bridge two months later, trying to make it look like they had acted irresponsibly for not anticipating the problem.

It takes quite a lot of effort for someone to manage to make a health insurance corporation seem like a genuinely sympathetic victim, but Matt Rosendale seems to have accomplished exactly that. Astonishing.

As for why he appears to have pulled such a dick move?

..."Why is he frustrated with something that was foreseeable?" Ward asked. "To be honest, it seems like a political game." Rosendale is seeking the Republican nomination for the U.S. Senate seat held by Democrat Jon Tester.

I'm sure that has no connection to this at all.