The ups and downs of Montana healthcare increases

By David Crisp

I got a “Dear David” email from U.S. Sen. Steve Daines, R-Mont., on Friday that began, “I don’t want to be the bearer of bad news … .”

Actually, it sounded like he was delighted to be the bearer of bad news. Proposed healthcare premiums under Obamacare are soaring next year, the email said, proving once again that “Obamacare is failing Montanans,” and allowing him to echo what has been a Republican mantra ever since the bill passed.

Unfortunately, U.S. Sen. Jon Tester, D-Mont., wasn’t much more helpful. In a statement on Friday, he said, “It is outrageous that a major corporation is trying to raise insurance rates on Montanans as they hand out lavish bonuses to their executives.”

Neither senator wastes the precious time of his constituents by delving into the actual facts.

A quick check of the website of the state insurance commissioner, Monica Lindeen, bore out the bad news. For people buying individual health insurance outside of their employer or other group plan, Blue Cross Blue Shield of Montana is proposing a rate increase of 62 percent next year. Montana Health Co-op is asking for an increase of 22 percent, and PacificSource is asking nearly 20 percent.

Eye-popping numbers. But let’s keep a few things in mind:

♦ These increases apply only to the 35,000 or so Montanans who get individual coverage without a federal subsidy. Most Montanans get health insurance through their employer, through Medicare or Medicaid or through a subsidized Affordable Care Act plan.

♦ These are proposed increases, not actual increases. Lindeen will hold a public hearing on the increases at 9 a.m. Tuesday, July 26, at the Scott Hart Auditorium, 302 N. Roberts St. in Helena. You can go there to hear the insurance companies make their case, or you can comment at www.csimt.gov through Aug. 5.

♦ One reason rates are proposed to rise is that a federal program designed to ease the transition into Obamacare is expiring this year. No one expects it to be renewed because Republicans control both houses and they have both an ideological and political commitment to making sure Obamacare fails.

♦ Rate hikes are an enduring characteristic of the U.S. healthcare system. According to the Commonwealth Fund, rates in Montana increased 59 percent between 2003 and 2011. Transition to Obamacare artificially constrained rate increases as insurance companies bid for a share of an uncertain market. Now they are trying to make up for lost revenues as the market stabilizes and they gain experience. That’s called capitalism.

♦ Prescription drug prices, which Congress has declined to constrain, continue to rise rapidly.

♦ Overall, healthcare costs under Obamacare have remained remarkably low. Although healthcare costs continue to rise faster than inflation, annual increases have fallen steadily from nearly 12 percent in 2007 to an estimated 6.5 percent this year and next.

♦ More people have health insurance than ever before, and that’s good. A study by the Harvard School of Public Health found that for every 830 people who gain health insurance, one death per year is prevented. About 75,000 Montanans have acquired health insurance under Obamacare’s provisions. How much are those lives worth?

♦ Obamacare also appears to be saving lives in other ways. In December, the Obama administration announced that provisions of Obamacare were a factor in some 50,000 fewer preventable deaths since 2010 by helping to reduce so-called HACs, or hospital-acquired conditions.

♦ Jay MacDonald at Bankrate reported in December on a Centers for Disease Control finding that the number of people under age 65 who struggled to pay their medical bills had declined for the fourth straight year.

♦ Insurance companies may not be as bad off as they claim. Blue Cross Blue Shield based its 62 percent rate increase in part on these dismal numbers: It collected less than $175 million in premiums in 2015 while paying out nearly $221 million. But it also requested a 32 percent rate increase for its small-group plans, although premiums in that category exceeded claims by more than $15 million.

♦ A Blue Cross Blue Shield report in March found that new enrollees under Obamacare were sicker and used more medical services that those who had previously enrolled under individual insurance plans. But as Kevin Drum at Mother Jones points out, the new enrollees were no sicker than those getting health insurance from employers. Easy explanation: Before Obamacare came along, sick people could not get, or keep, their own health insurance. Now they can, and they are making up for years of neglect.

♦ To a large extent, the rate increases are a consequence of the free market at work. Congress could have controlled costs by imposing some sort of national healthcare system on Americans, or by enacting Medicare for all. It chose not to do that, and this is what you get.

None of the above makes life any easier for those 35,000 Montanans who may see their insurance costs skyrocket next year. They need help. Congress could provide it, but here’s betting it won’t.

This article originally appeared in Last Best News in Billings.