Posted: Jun 25, 2013 7:16 PM by Marnee Banks - MTN News
HELENA - Under the federal Affordable Care Act, often referred to as "Obamacare," health insurance companies are forced to beef up their policies and offer better coverage.
They also have the option of selling their policies through an online marketplace called a health insurance exchange.
Here in Montana, three companies will be selling policies on the exchange: Blue Cross-Blue Shield, PacificSource, and the Montana Health Cooperative.
According to a report issued by MT Insurance Commissioner Monica Lindeen, the average price of an individual policy on the exchange will cost about $273 per month.
Lindeen says that if Obamacare had not passed these policies would cost $17 more per month.
Lindeen said, "I was concerned like most Montanans are about what the rates are going to be. So I am happy and really relieved that it looks like rates on average will be lower."
So how are insurance companies offering better policies and charging less?
Lindeen says the exchange forces insurance companies to be more competitive, because if they aren't, consumers will go somewhere else to buy health insurance.
Lindeen said, "What you are doing is actually creating larger pools of risk for those products, instead of smaller pools, which spreads the risk more."
Lindeen also says in anticipation of Obamacare going into effect, most insurance companies in Montana had already adjusted their policies to include better benefits, so they know what many of these new mandated changes cost.
But after talking to the insurance companies, no one really knows exactly who or how many people will be shopping on the exchange.
Lindeen estimates anywhere between 180,000 to 300,000 Montanans could purchase policies through the exchange.
She says these people could be uninsured, underinsured, or those with current insurance.
And insurance companies admit setting rates with these variables is difficult.
So until the exchange goes online in 2014, there are still many unanswered questions.