HELENA — Federal health officials say Montana has failed to create a system to review health insurance rate increases in the state, and therefore the federal government will begin doing it on Sept. 1.
Monica Lindeen, the state auditor and insurance commissioner, said she received the news earlier this month, and that Montana health insurers will have to file their rate increases with the federal government.
If those increases are more than 10 percent, the feds will review the rates and determine if they're "unreasonable," she said, but won't have the power to reject them.
The 2010 federal health reform law requires a health insurance rate-review process to be in place in every state, either by the state or the federal government.
Lindeen had asked the 2011 Legislature to approve a bill giving her the review authority and allowing her office to negotiate with insurers on rate increases deemed unreasonable.
But the Republican-controlled Legislature killed those bills, saying it wanted nothing to do with implementing the new federal health reform law.
"I have no authority to (negotiate on rate increases) now," Lindeen, a Democrat, said Thursday. "While (the feds) will be reviewing those rates, it's not going to change the rates.
"(The feds) have told us they'll make the data available for us to view and we'll be able to look at it. But because we have no legal authority to do anything about it, all we can do is look at it."
Sen. Jason Priest, R-Red Lodge, who led the charge to kill one of the rate-review authority bills supported by Lindeen, said Thursday that Lindeen could have supported another rate review bill, but didn't.
That bill, sponsored by Priest, would have required Lindeen to conduct a "cost-benefit analysis" of any new mandate for health insurance coverage, to see if it would increase the cost of insurance or health care.
The Legislature passed the bill, but Gov. Brian Schweitzer, a Democrat, vetoed it.
"We know that insurance mandates cost $1,200 a year for the average policyholder (in Montana)," Priest said. "(Democrats) had a choice for rate review and they chose to vote against it."
Schweitzer also vetoed numerous other Republican bills that proposed alternative reforms, Priest said, such as bills to allow insurers to sell health insurance across state lines.
Blue Cross Blue Shield of Montana, the state's largest private health insurer, generally supported Lindeen's proposal to create state rate-review authority, and still believes such review is best handled at the state level, company spokesman Tim Warner said Thursday.
However, Blue Cross doesn't expect a problem filing its rate increases with the federal government and "will comply with all applicable state, federal and local laws," he said.