HELENA, Mont. — Health insurers selling individual policies on Montana’s Affordable Care Act marketplace say rate increases are likely next year after they suffered losses they attribute in part to initial underestimates of the costs of the new business.s
Companies are filing requests for higher rates. Montana’s insurance regulator, state Auditor Monica Lindeen, said Friday that her office has just begun reviewing the requests and that she’ll likely object to parts of the increases. She added that it’s possible insurers are overestimating expected costs or other factors.
Individuals started buying policies on the marketplace, choosing among four companies, in late 2013. Montana and other states set up online marketplaces where consumers can compare prices and coverage and in some cases get federal subsidies.
Under the Affordable Care Act, insurance companies couldn’t refuse anyone who wanted to buy or take into account pre-existing health conditions in setting prices.
Insurers said Friday that costs for their new customers came in higher than expected in 2014, citing as key factors drug prices and high-cost single patients.
“What we’re seeing across the country is that nearly all health insurers, large and small, are losing money in the individual marketplace,” said Todd Lovshin, vice president and Montana regional director for PacificSource, which offers policies on Montana’s marketplace.
PacificSource, which has its headquarters in Springfield, reported a loss of about $17 million last year. It serves about 275,000 customers on commercial insurance, Medicare plans and managed Medicaid plans.
The Montana Health Co-op, a new nonprofit insurer, lost about $4 million last year on $30 million worth of business, said its CEO, Jerry Dworak. The co-op insures about 25,000 people in Montana and another 19,000 in Idaho.
Companies had little to go on when the marketplace was set up and they pursued new customers aggressively, Dworak said.
Blue Cross’ parent company, Health Care Service Corp., reported losses of $282 million for 2014 — compared with a gain in the previous year of $684 million.
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