Montana exploring reinsurance (for heaven's sake, just DO IT!)

via Montana Standard:

The state is exploring whether a Montana-run reinsurance program would help lower the premiums people pay when buying their health insurance on the federal marketplace, in some cases by 10-20 percent.

Yes. Yes, it would.

...Montana Gov. Steve Bullock and Department of Administration Director John Lewis are creating a 13-person working group to explore how a state-run reinsurance program might work in Montana. The group will use information from a recent study commissioned by the Montana Healthcare Foundation looking at what reinsurance could mean for the state.

The study shows reinsurance could lower premiums that have risen by double digits in recent years. Those rates could drop anywhere from 9.6 percent to nearly 30 percent on extreme ends of the spectrum, according to the study.

Yep. Hell, Maryland's new reinsurance program is so generous it caused a whopping 43 point drop in 2019 rates vs. what they otherwise would've been. A 10-20 point drop for Montana is most likely, depending on how it's structured.

...The working group would draft legislation to bring to the 2019 Legislature, which meets January-April. The Legislature must pass a bill for the state to apply for the waiver.

John Doran, vice president of external affairs and chief of staff at Blue Cross and Blue Shield of Montana, said a reinsurance pool is the company’s top priority for the 2019 legislative session.

...Doran said while the marketplace has had instability since its start, three recent changes have increased the problem:

  • the elimination of the individual mandate starting in 2019;
  • the expansion of short-term policies that are less expensive but can provide less coverage; 
  • the end of cost-sharing reduction payments; even though federal funding is gone insurance companies are still required to provide them.

No kidding. It's almost like healthcare wonks like myself have been screaming about all three of these from the rooftops for a year and a half or something...