Montana Insurance Premium Increase Another Knock for Obamacare

With public approval for President Obama’s signature healthcare law continuing to sag, Montana Commissioner of Securities and Insurance, Monica Lindeen, announced double digit rate hikes for health insurance last week.

The hike deals yet another serious blow to the Affordable Care Act (ACA), commonly known as Obamacare, which was rammed through congress in 2010 on the promise that the law would reduce healthcare costs and insurance premiums.

According to the Commissioner’s office, “the rate increases will range from about $80 to about $88 a month for a popular Silver level plan for a 40 year old – a difference of between 33 percent and 37 percent higher than 2015 rates in the individual health insurance market. The average rate increase across all plans ranges between 22 percent and 34 percent across all companies.” The hikes will affect nearly 41,000 people across Montana starting in 2016.

According to the insurance companies themselves the rate hike is due to the rising cost of healthcare. While the Affordable Care Act was sold as a mechanism to decrease the cost of care, Montana’s three largest health insurance providers told Commissioner Lindeen back in June that the requested increase was needed because in 2014—the year which Obamacare took full effect—all had paid out more in coverage claims in the state than they had taken in through premiums.

President Obama claimed just last March that “If premiums had kept on growing over the last four years at the rate they had in the previous decade, the average family premium would be $1,800 higher than it is today”—effectively taking credit for stopping theoretically greater increases in insurance premium which might have happened if Obamacare had not been passed. According to recent studies from the Annenberg Public Policy Center, however, any recent slowdown in the growth of national health insurance premiums is due “largely to the (nation’s) sluggish economy and only partly to the ACA.”

Other studies have shown the ACA contributing directly to cost increases over and above the “natural” price increases without Obamacare. A study from the non-partisan National Bureau of Economic Research and published by the Brookings Institution found that Montana experienced the largest percentage increase in non-group health insurance premiums of any state in 2014 thanks to Obamacare.

The president’s claims of the ACA simply slowing the growth of healthcare costs is also a far cry from then candidate Obama’s 2008 promises that his healthcare plan would directly decrease premiums by up to $2500 per year, per family.

Montana’s federal policymakers, including U.S. Senator’s Jon Tester (D) and Steve Daines (R) have expressed their disappointment with the increases, though the delegation differs significantly in opinions on how to solve the problem.

Daines–who was elected in 2014 when Obamacare’s chief architect, former Montana U.S. Sen. Max Baucus, retired from the Senate to accept a nomination by President Barack Obama as the United States’ Ambassador to China—points to “burdensome taxes and senseless regulations” and calls for a full repeal of ACA.

Daines’ arguments echo the sentiments of conservative lawmakers (see Attachment 1) in 2010, before law was officially passed, who claimed that Obamacare’s implementation would result in rising healthcare costs, increases in health insurance premiums, and slowed economic growth due to the burden of tax increases.

Tester, who was lambasted by opponents during the 2012 election cycle for casting what they called “the deciding vote for Obamacare,” now admits that ACA has serious problems, but fails to go as far as Daines in calling for a full repeal.

“We need to do some fixes to help move the ball forward,” Tester told the Associated Press in an interview last week. “Going back to the old system isn’t an option.”

Tester, who has been scrutinized by Media Trackers in the past for siding with President Barack Obama nearly 95% of the time, has remained steadfast in his support for ACA over the years, claiming that the law would “increase competition among insurance providers (aka lower premiums) and provide healthcare coverage to millions of Americans who were otherwise without.

Polling data taken in August found that 54% of Americans continue to oppose Obamacare, while only 41% support.