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Coverage costs skyrocket



Earlier this month, Anthem Blue Cross of California announced huge rate increases—as much as 39 percent—for individuals who buy its health insurance coverage, sparking a furor around the country and emboldening supporters of health care reform. Turns out, Blue Cross and Blue Shield of Montana (BCBSMT) is raising its individual insurance rates, too—and, in some cases, by just as much as Anthem.

The state auditor's office has seen a surge this year in the number of Montanans complaining about soaring health insurance rates.

"What we've been hearing—and there's definitely been an increased number of calls—is [an increase] from Blue Cross and Blue Shield somewhere from 39 to 43 percent," says spokesperson Jackie Boyle, stressing that her office likely hears only about the extreme cases.

BCBSMT is a nonprofit, mutual benefit company—unlike Anthem, Blue Cross' for-profit model—and is Montana's largest insurer, covering more than 250,000 people. Tim Warner, the company's senior director of external affairs, says most rate hikes this year fall between 10 and 20 percent, on par with recent years. Warner acknowledges some increases around 40 percent, but calls them "exceptionally unlikely." He says any increase is a function of ever-rising health care costs.

"As the costs of health care have gone up, and the amount that hospitals and doctors are charging have gone up, and the use of prescription drugs and the reliance on prescription drugs and the price of prescription drugs have gone up," Warner says, "it stands to reason that you would expect health insurance rates to go up."

A BCBSMT letter to a member, dated Feb. 10 and obtained by the Independent, notifies of a roughly 40 percent rate increase with an effective date of April 1. Such an increase, Warner explains, results from a high utilization rate and a high medical loss ratio within a specific group.

"Anybody who has bought into a health insurance product from our company and there's a premium increase that high," Warner says, "they really us so we can work with them to see if there's a better solution."

The auditor's office lacks authority to crack down on rate increases, but Boyle says it plans to better track complaints to inform future legislative initiatives.


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