1332 Waiver Application for Public Comment
May 15, 2019
About the waiver
Senate Bill No. 125, establishing a Montana public reinsurance program, was signed into law on April 30, 2019. SB 125 authorizes the governor, the insurance commissioner, and a governing board of the Montana Reinsurance Association created by SB 125 to jointly apply for a State Innovation Waiver from the federal government, and the public is invited to comment on Montana’s application. The waiver, also known as a 1332 waiver, is an opportunity for states to implement innovations that help increase access to quality, affordable health insurance for their residents. Federal savings from these changes can be used to fund innovation at the state level.
Montana intends to use the waiver authority to fund a Montana public reinsurance program. The reinsurance program will reimburse health insurance exchange insurers for certain high-cost claims in the individual health insurance market. The law provides that the reinsurance plan would use a mix of federal and state funds to produce individual health insurance premiums that are lower than they would be without the plan. Under the law, the reinsurance program will reimburse individual health insurers for a proportion (coinsurance amount) of the cost of certain high-cost claimants between a minimum lower bound (attachment point) and a maximum upper bound (cap).Montana also expects this will cultivate greater certainty in the market and facilitate insurance companies’ continued participation throughout the state in the individual market.
Request for Proposal: Reinsurance Program Administrator
RFP Document (February 13, 2020)
How to comment on the application:
View the 1332 Waiver Application
Although you may comment in person or in writing, if you comment in person, you are strongly encouraged to also submit comments in writing. Written comments, whether submitted in addition to or instead of in-person comments, will be accepted through June 17, 2019 at 3:00pm. Submit written comments by email to : Reinsurance@mt.gov
View the Section 1332 State Innovation Waiver Actuarial and Economic Analysis, completed by Wakely Consulting Group.
The Montana Department of Administration will conduct two (2) public hearings regarding the Montana Reinsurance Waiver application. The meetings will consist of a presentation about the waiver, followed by time for questions and comments from the public. The meeting dates, times, and locations are:
Tuesday, June 4, 2019
11:00am - 12:00pm
Butte-Silver Bow County Building
Room 103,155 W Granite Street, Butte MT 59701
Monday, June 17, 2019
1:30pm - 3:00pm
Montana State Capitol Building
Room 152, 1301 E 6th Ave, Helena, MT 59601
Montana is committed to accommodating people with disabilities. will make reasonable accommodations for persons with disabilities who need an alternative accessible format of rule notices or provide reasonable accommodations at the public rule hearing site. If you need to request an accommodation, contact the department to advise us of the nature of the accommodation that you need at 406-444-5764 or via email at firstname.lastname@example.org.
With bipartisan support, Montana’s 66th Legislature passed Senate Bill 125 establishing the Montana Reinsurance Association and Program.
A public reinsurance program provides payments to insurers to help offset the expenses associated with high cost enrollees who incur high cost claims. Because insurers do not have to cover the full cost of high-cost claims, they are able to keep premiums at lower rates for all enrollees, which could help to encourage additional individuals to enroll in the market.
In addition, Reinsurance will:
- Lower insurance premiums to keep consumers in the individual market and attract new entrants to help reduce the number of Montanans without health insurance.
- Lower premiums to provide financial relief for those not eligible for subsidies.
- Lower costs for tribes implementing TSHIP programs.
- Help ensure a competitive individual market where Montanans across the state have a choice of three ACA insurance options.
The State of Montana must apply by July 1, 2019 to the Secretary of Health and Human services under 42 U.S.C. 18052, for a state innovation waiver and federal pass-through funding to implement in the 2020 plan year. The application must be signed by the Insurance Commissioner and the Governor.
The premium reductions will take effect in January of 2020.
To fund the program a premium tax will be assessed on all major medical policies sold in Montana, excluding self-funded group plans, raising an estimated $15 million state share. An additional $60 million in federal funding will be issued that would have otherwise been used as premium tax credits under the Affordable Care Act.
The program will be administered by a non-governmental Board of Directors and an Administrator will advise and assist the Insurance Commissioner’s Office.
A newly created five-person board of directors will oversee the distribution of the funds to the insurance companies to offset high dollar claims. The Montana Reinsurance Association Board Members are as follows:
- Dr. Monica Berner, President, BCBSMT
- Richard Miltenberger, CEO, Montana Health Co-op
- Cody Langbehn, V.P. and Montana Regional Director, PacificSource Health Plan
- Richard Daniels, CFO, Allegiance Benefit Plan Management (Commissioner appointment)
- Mike Batista, Associate State Director, AARP Montana (Governor's appointment)