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Montana uses the federally run health insurance exchange with three insurers offering plans in the marketplace. For 2023, the overall average rate change amounted to an increase of nearly 10%, but most enrollees get premium subsidies and the subsidies are designed to keep pace with the cost of the benchmark plan (second-lowest-cost silver plan).
And subsidies are larger than they used to be. The Inflation Reduction Act ensures that the American Rescue Plan’s temporary subsidy enhancements continue to be available through 2025, keeping coverage at the same general levels of affordability that enrollees had in 2022.
Montana uses the federally run exchange at HealthCare.gov.
Montana’s legislature not only failed to authorize a state-run exchange, it also passed a bill in 2011 to prohibit the creation of an insurance exchange in Montana.
While Democratic Gov. Brian Schweitzer vetoed that bill, neither he nor Monica Lindeen, who was then serving as the state auditor and insurance commissioner, were able to generate legislative or public support for an exchange. So Montana residents use the federally-run HealthCare.gov as their exchange. (There are 32 other states that also use HealthCare.gov; the states that run their own exchange are the minority.)
Under the federal model, most aspects of the exchange are managed by the federal government. However, states can retain control of “plan management” functions, and Montana opted to do so. The Insurance Commissioner’s office regulates plans that operate on the exchange, as it does for plans sold outside the exchange.
The open enrollment period for individual/family health coverage runs from November 1 to January 15 (this window applies to plans purchased through the exchange as well as plans purchased directly from an insurance company). Outside of open enrollment, a qualifying event is necessary to enroll or make changes to your coverage.
For 2023 coverage, there are three insurers that offer exchange plans in Montana:
Insurer participation in Montana’s exchange has been remarkably stable since the exchange opened for business in 2014. There are three insurers that have offered plans statewide each year: Blue Cross Blue Shield of Montana (Health Care Service Corporation), PacificSource, and Montana/Mountain Health CO-OP (the state requires participating insurers to offer coverage statewide). Most states have seen fluctuation in terms of insurer participation in their markets and Montana’s has been quite steady.
Time briefly joined the exchange in 2015, although their parent company, Assurant, subsequently announced that they would exit the insurance market nationwide at the end of 2015, and would no longer offer coverage in 2016. As of June 2015, there were 7,283 Montana residents who had individual coverage from Time; all of them had to select replacement policies for 2016.
Only a small fraction of the states did not lose any carriers in their exchanges in 2017, and Montana was among them. But although there were still three participating insurers in 2017, plans were only available for purchase from BCBSMT and PacificSource from December 22, 2016 until July 2017, due to an enrollment freeze for Montana Health CO-OP.
People who purchased Montana Health CO-OP plans before December 22, 2016 had coverage from the CO-OP throughout 2017. But the CO-OP limited their enrollment for 2017 (some carriers in other states did this too, including Medica in Minnesota and Kansas), and the following message began appearing in December 2016 when visitors arrived at their website:
“Montana Health CO-OP will accept no new enrollments for 2017 after the evening of December 22. We are halting new enrollments because of the large number of new members for 2017. Thank you to all our 10,000+ new members!”
From December 23 through the end of January 2017 (the remainder of open enrollment), enrollees in Montana were able to select from Blue Cross Blue Shield of Montana, and PacificSource. And that was also true for people signing up during special enrollment periods until July 2017.
But the enrollment freeze was lifted in July 2017 — ahead of schedule. Montana Health CO-OP had originally planned to start offering coverage as of November 2017 (ie, during open enrollment, for coverage effective January 2018). But as of mid-July, the CO-OP website said “MHC is now accepting special enrollments off exchange. On-exchange special enrollments to begin soon! (off exchange means plans purchased directly through the CO-OP, as opposed to via HealthCare.gov) A representative confirmed by phone that the CO-OP had recently received regulatory approval to begin selling plans again, and indicated that on-exchange plans would be available by late July, for effective dates starting in September. As is the case nationwide, enrollments outside of open enrollment are contingent upon having a qualifying event, but people with qualifying events could select Montana Health CO-OP plans with effective dates of September – December. And as of November 1, 2017, CO-OP plans became available during the regular open enrollment period for coverage effective January 1, 2018.
The enrollment freeze did not apply to small group plans, which are available year-round.
Montana Health CO-OP has also expanded into neighboring Idaho and Wyoming over the last several years, with the Wyoming expansion new as of 2021.
The same three insurers — Blue Cross Blue Shield of Montana, PacificSource, and Montana Health CO-OP — continue to offer plans in Montana’s exchange as of 2022, and residents in all areas of the state can select from among all three insurers’ plans.
Montana’s individual/family health insurers have implemented the following average rate changes for 2023:
Overall, the weighted average rate increase is about 9.6% for 2023, which is slightly higher than the insurers initially proposed (the CO-OP had initially proposed an average rate increase under 3%, so their slightly larger final rate change pushed the overall average a little higher).
It’s important to remember that average rate changes don’t tell the whole story, for several reasons:
For perspective, here’s a look at how premiums have changed in Montana’s individual market in prior years:
51,134 people enrolled in private individual/family plans through Montana’s exchange during the open enrollment period for 2022 coverage. That was the highest Montana’s exchange enrollment had been since 2017. Nationwide, enrollment for 2022 was a record high, although Montana’s exchange enrollment has not yet returned to the levels it was at from 2015 through 2017.
Here’s a summary of how enrollment has changed over the years in Montana’s exchange:
In addition to on-exchange enrollments, nearly 35,000 people enrolled in Obamacare-compliant plans outside the exchange by mid-April 2014. But as of 2019, off-exchange enrollments had dropped to an estimated 15,000 people. Another analysis indicated that the off-exchange individual market in Montana had 28,261 enrollees in 2016, and only 13,372 by 2018.
One of the provisions of the ACA requires that carriers use a single risk pool for all of their individual plans in a state, so each carrier’s off-exchange enrollments are merged with its on-exchange enrollments for risk purposes — meaning that off-exchange enrollments are helpful in stabilizing rates. Inside the exchange, premium subsidies protect most consumers from the brunt of annual rate increases, but there is no such mechanism outside the exchange, and increasing prices over the years have made full-price plans less affordable, resulting in a sharp decrease in the number of people enrolled in full-price plans outside the exchange.
Lawmakers in Montana passed HB652 in 2017, which called for the state to submit a 1332 waiver proposal to CMS, seeking permission to establish “a state reinsurance program, a high-risk health insurance pool, or any other program or combination of programs identified by the commissioner or the legislature.”
As noted below, the process of implementing the program was a bit bumpy in Montana. But the 1332 waiver did get submitted and CMS approved it in August 2019. The state’s reinsurance program took effect in 2020. As of 2022, Montana is one of 15 states with reinsurance programs (Virginia will bring that number to 16 as of 2023).
In 2017, Governor Steve Bullock vetoed HB652, noting that it was too broad and gave too much power to the Insurance Commissioner to make changes to Montana’s health insurance market without public input.
Although reinsurance programs have typically had bipartisan support in several states, high-risk pools are generally opposed by Democrats, as they serve to bifurcate the market and separate sick people into their own risk pool (they were also generally underfunded and insufficient in the pre-ACA days when they were used by most states). Montana’s then-Insurance Commissioner Matt Rosendale supported HB652, and was critical of Bullock’s veto.
The Montana legislature only has regular sessions in odd-numbered years, so there were no new bills in 2018. But Governor Bullock and Department of Administration Director John Lewis established a 13-person working group in 2018, tasked with analyzing how a Montana-based reinsurance program could work to lower premiums by 10-20% in the state’s individual insurance market, and developing bipartisan legislation that could be presented to lawmakers during the 2019 session.
That legislation, S.B.125 (the Montana Reinsurance Association Act), was introduced by Senator Steve Fitzpatrick in January 2019, and was signed into law by Governor Bullock in May. The legislation called for the creation of a five-member board of directors for the reinsurance program, including representatives from each of the three insurers that offer individual market coverage in Montana (PacificSource, Montana Health CO-OP, and BCBS of Montana).
The legislation directs the reinsurance program to assess all major medical and disability insurers in the state (not including self-funded plans) a fee equal to 1.2% of their premium revenue from the previous year. The revenue generated by this assessment is combined with federal pass-through funding that the state has secured via a 1332 waiver.
(Pass-through funding refers to the fact that premiums will be lower with the reinsurance program, which means that premium subsidies will also be smaller. By using a 1332 waiver, Montana can receive federal permission to keep the savings that result from the smaller premium subsidies — instead of having the federal government keep that money — and use it to fund the reinsurance program.)
Reinsurance programs work by using the pool of state funds and federal pass-through funds to reimburse insurers for a portion of their high-cost claims. Insurance pools tend to have a fairly small number of very high-cost enrollees, and the claims for these individuals skew the total costs of the pool upward, resulting in higher premiums for everyone. By offsetting these very high-cost claims, the reinsurance program can stabilize the market and bring down premiums for the whole pool of insureds. In Montana, premiums were projected to be 10-20% lower with reinsurance than they would otherwise have been. Once rates were finalized for 2020, they ended up being about 13% lower than they were in 2019.
But this really only affects people who don’t get premium subsidies; for those who do get premium subsidies, their premium subsidies shrink in line with the decreasing premiums, resulting in net premiums that are roughly the same (or possibly even a little higher — the average benchmark premium in Montana, on which subsidy amounts are based, dropped by 14% for 2020, while overall average premiums decreased by about 13%). In Montana, there are an estimated 15,000 people who buy their ACA-compliant health plans outside the exchange and thus do not receive premium subsidies. And nearly 7,000 people bought full-price plans in the Montana exchange for 2019 (another 38,000 people bought plans in the Montana exchange with the help of premium subsidies).
Montana’s reinsurance board was tasked with sorting out the specifics of how the program would operate, although the legislation gave them some guidelines (which are fairly similar to the specifications that other states have established for their reinsurance programs). The basic parameters and the board’s projected guidelines are as follows:
For 2020, Montana expected the reinsurance program to cost $34.5 million. According to the 1332 waiver proposal that Montana submitted, the state expected federal pass-through funding to amount to $22 million in 2020 (with a range of $16.5 million to $25.8 million; CMS determines the actual number each year based on actual enrollment, and it amounted to $22.5 million). The remainder of the funding came from the state’s assessment on insurers.
For 2021, Montana’s federal pass-through funding amounted to $30.8 million. And for 2022, the pass-through funding amounted to $29.7 million. (Pass-through funding is higher in 2021 and 2022, due to the American Rescue Plan‘s subsidy enhancements. These enhancements are expected to be extended through 2025, under the Inflation Reduction Act.)
Montana’s former Commissioner of Securities and Insurance, Republican Matt Rosendale, was elected in November 2016. Rosendale opposes the ACA and has long pushed for a more conservative, “free-market,” Montana-based approach to health care reform. Rosendale’s views are diametrically opposed to those of his predecessor, Commissioner Monica Lindeen (Lindeen was term-limited, and couldn’t run in 2016).
In 2018, Rosendale ran for US Senate, challenging Democratic incumbent Jon Tester. Tester prevailed, but the race was tight, with only 4,200 votes separating the two candidates. Since Rosendale was the Insurance Commissioner in Montana, issues related to health care reform came up frequently in the campaign. Tester supported improvements to the ACA and has worked to protect access to health care in Montana. Rosendale, on the other hand, supports repeal of the ACA and has championed short-term health plans as well as health care sharing ministries as alternatives to ACA-compliant insurance. In 2017, Rosendale allowed Medi-Share to resume operations in Montana, a decade after the organization had been banned from the state for not paying claims associated with a member’s heart condition.
In a letter to U.S. Senator Lamar Alexander (R, Tennessee) in March 2017, Rosendale outlined his health care reform proposals, and noted that his letter superseded the letter that Lindeen had sent in late 2016. Rosendale wanted more flexibility to allow plans that aren’t ACA-compliant to be sold. This is one of the basic tenants of the ACA repeal provisions that Congressional Republicans pushed throughout 2017, and is something that the Trump Administration continued to address in proposed regulations over the next few years. It’s essential to understand, however, that allowing the sale of non-compliant plans would have a significant destabilizing effect on the insurance market and would drive up premiums for people with pre-existing conditions. Although Rosendale has long claimed to support protections for people with pre-existing conditions, expanding access to non-ACA-compliant plans does exactly the opposite.
Rosendale also wants equalized tax treatment for individual and employer-sponsored plans, and access to health savings accounts (HSAs) for everyone, rather than just those with high deductible health plans. These are logical changes, but costly due to the reduced federal tax revenue. And HSAs are certainly not a panacea for all that ails our health care system, even if everyone had access to one (although there’s dispute about the degree to which patients can realistically act as “consumers” and shop for health care coverage, it’s also important to note that HSAs only help if you’re willing and able to fund them, which obviously wouldn’t be the case for everyone).
Rosendale again ran for Congress in 2020, this time for the at-large House of Representatives seat. The House seat was previously held by Greg Gianforte, who successfully ran for governor in 2020. Rosendale won the election to replace Gianforte in the House of Representatives. His successor, Troy Downing, now serves as Montana’s Commissioner of Securities and Insurance.
Blue Cross Blue Shield of Montana’s initial proposed rate increase for 2018 was significantly larger than the other two insurers. But part of that had to do with how the insurers initially handled the uncertainty surrounding federal funding for cost-sharing reductions (CSR).
Throughout 2017, President Trump threatened to cut off funding for CSR. Montana’s Insurance Commissioner didn’t tell insurers to take a specific approach to CSR funding, so it was left to the insurers to price their rates as they saw fit.
Montana Health CO-OP and PacificSource both filed rates that were based on the assumption that CSR funding would continue in 2018. Blue Cross Blue Shield of Montana took the opposite approach, basing its rate proposal on the assumption that CSR funding would not continue.
But on October 12, 2017, the Trump administration announced that federal funding for CSR would end immediately, leaving Montana Health CO-OP and PacificSource in a tough spot — one that the CO-OP described as “untenable” and “not survivable” unless they were allowed to refile new rates with the cost of CSR included. The CO-OP indicated that they would have to exit the exchange if they weren’t allowed to file new rates, and at first, it appeared that might be the case.
CMS had opened up a short window after the CSR defunding announcement, to allow insurers to refile new rates if they were in states where regulators had not allowed them to file initial rates based on the assumption that CSR funding would end. But since Montana regulators had not told the insurers how to file (and BCBSMT had already filed rates with the assumption that CSR funding would end), CMS initially told the Montana Department of Insurance that Montana insurers would not be eligible to refile rates.
But on October 16, CMS reversed that decision and notified the Montana Department of Insurance that Montana Health CO-OP and PacifiSource would be allowed to refile their rates for 2018. Montana Health CO-OP added 24% to their Silver plan rates, and PacificSource added 11% to their Silver plan rates. At other metal levels, the previously filed rates remained unchanged for both insurers, but the higher premiums for silver plans resulted in average rate increases of 16.6% for Montana Health CO-OP and 13.1% for PacificSource, instead of the single-digit rate hikes they had initially filed.
Although the insurers were allowed to add the cost of CSR to their 2018 rates, Montana Health CO-OP sued the federal government over the CSR revenue that they didn’t receive for the final quarter of 2017. A judge ruled in favor of the CO-OP in October 2018, ordering CSM to pay the CO-OP $1.2 million to cover CSR costs from October – December 2017.
Adding the cost of CSR to Silver plan rates is the strategy that protects most consumers, since premium subsidies in 2018 are larger as a result of the spike in Silver plan rates. Those subsidies can be applied to bronze or gold plans, making them a relatively better value. And for people who don’t qualify for subsidies, bronze and gold plans continue to be available without the added cost of CSR.
In Montana, 85% of exchange enrollees qualified for premium subsidies in 2017, and that grew to 87% in 2018. And average subsidies were more than twice as large in 2018 (the average enrollee who gets a premium subsidy in Montana was receiving $637 per month in 2018, as opposed to $304 per month in 2017; to clarify, the subsidy is sent to the insurance company on the enrollee’s behalf — it’s not sent directly to the enrollee). The larger subsidies are a result of the much higher silver plan rates, as subsidy amounts are based on the cost of the benchmark plan (second-lowest-cost silver plan in each area).
Subsidies have become even larger and more widely available since 2021, under the American Rescue Plan. And those provisions are expected to be extended through 2025 under the Inflation Reduction Act.
On November 25, 2013 Lindeen announced that Montana would allow health insurance carriers to extend 2013 policies that had been scheduled to terminate at the end of the year, but it was left up to each carrier to decide how to proceed. Insureds with a policy that was eligible for renewal into 2014 also had the option of switching to an exchange plan.
Ultimately, none of the insurance carriers in Montana’s individual market opted to keep transitional plans in place, and all non-grandfathered plans in the individual market in Montana are now ACA-compliant.
State Exchange Profile: Montana
The Henry J. Kaiser Family Foundation overview of Montana’s progress toward creating a state health insurance exchange.
Montana Consumer Assistance Program, Office of the Commissioner of Securities and Insurance
Serves as the state government watchdog for citizens of Montana in the insurance industry
Health Insurance Exchange Page from Montana Commission of Securities and Insurance
Details about how the exchange works, along with legislative history in Montana regarding the exchange creation process.
In Montana, federal regulations regarding short-term health insurance apply.
Montana's Medicaid work requirement proposal is still under consideration by CMS, but is unlikely to be approved.
More than one in five residents are covered by Medicare in Montana.
Find affordable individual and family plans, small-group, short-term or Medicare plans.
The state covers Home and Community Based Services (HCBS) for single enrollees with incomes up to $783 a month.
Learn about adult and pediatric dental insurance options in Montana, including stand-alone dental and coverage through the Montana marketplace.
Our state guides offer up-to-date information about ACA-compliant individual and family plans and marketplace enrollment; Medicaid expansion status and Medicaid eligibility; short-term health insurance regulations and short-term plan availability; and Medicare plan options.