A new state-claims based reinsurance program could save Montanans from 10 to 20 percent on individual health insurance premiums.

Aaron Wernham, Montana Healthcare Foundation CEO said the rapid rise in Affordable Care Act premiums and deductibles has health insurance consumers worried.

“We’ve seen insurance rates on the individual markets increasing into the double digits over the last couple of years,” said Wernham. “At the Montana Healthcare Foundation, we took a look at one way in which the state might be able to help control costs for people who have to buy individual insurance. We looked at a program called a 1332 waiver to create what’s called a state reinsurance program. We had an actuarial firm look at what it might look like in Montana and found that we could see reductions of between 10 and 20 percent.”

Wernham said the 1332 Waiver program can lead to a more efficient use of federal health care funds.

“By reducing the cost to insurers of paying those high-cost claims, that means everybody else ends up paying a little bit less on the front end,” he said. We have seen for the first two states that have introduced this plan, Alaska and Minnesota, we have heard reports of anywhere from 20 percent to even 30 percent in first year premium reductions.”

In the last two years, Montana’s individual health insurance market has experienced double-digit premium increases and enrollment has decreased from approximately 80,000 Montanans in 2016 to about 62,000 according to an enrollment study conducted in April.


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