62 Percent Rate Increase by Montana Blue Cross Blue Shield Among the Highest Nationwide

When Blue Cross Blue Shield of Montana requested that its health insurance rates jump by an average of 62 percent, even State Insurance Commissioner Monica Lindeen said she was “shocked.” Author and commentator Yevginiy Feyman studies insurance rates and currently works as a research assistant at Harvard, he says the rate request by BCBS is among the highest he has seen.

"This is a really interesting situation actually, In Montana it is also a little bit unique," said Feyman. "Basically Blue Cross has the bulk of the individual market there and they are the biggest player. There are pretty substantial rate increases being requested around the country, but this is among the highest I have seen so far."

Feyman says a lot of the price hike is likely due to the expiration of federal backstop programs like Risk Corridors and Transitional Re-insurance, however, Feyman says that lax negotiation by Blue Cross Blue Shield may also be part of the problem.

"I don't want to say this with certainty, but Blue Cross does control a big share of the market," Feyman said. "They have less incentive to try to push down costs on the pharmaceutical and provider side so they might just be allowing cost to increase because they know they have a big chunk of the market anyway."

While Blue Cross Blue Shield has received a lot of attention for its requested 62 percent rate increase, it is not alone. The lowest average rate request for Montana health insurance plans this year is a 19.8 percent increase requested by Pacific Source.