HELENA - The national health reform bill drafted by Sen. Max Baucus is described by some as a bonanza for private health insurers. After all, it does mandate that everyone in America eventually buy their product, or pay monetary penalties.

The bill also has elements health insurers are bound to like, such as no requirements on how much of their income must be paid out in claims, no government-run plan to compete with them, and allowing them to sell multistate or national policies, which they can't do now.

Montana's major health insurers - Blue Cross, New West and Allegiance - generally support the Baucus bill, saying it could take huge steps toward expanding health coverage for many Americans.

Yet they are not without reservations, saying its current draft falls short in two vital areas: controlling health care costs and, by extension, the cost of health insurance, in part because the mandate for everyone to buy it is too weak.

Without a strong mandate and better cost controls, they say, most of their new customers may very well be older and less healthy, thus driving up the cost of health insurance for everyone.

"I'm concerned that it won't change the fundamental drivers of health care costs," says David Kibbe, chief executive officer of New West Health Services, the state's second-largest health insurer. "Premiums will go up and people are going to be angry and upset - and that could create (momentum) for a government solution."

The harshest critics of the Baucus bill still see it as a boon for insurers, saying its primary purpose is to cement the role of private health insurance in America's system of providing health care.

"It won't actually curtail the insurance industry abuses, while mandating that people buy their product," says Quentin Young, national coordinator for Physicians for a National Health Program, which prefers government-sponsored coverage for all. "The entire bill, in essence, is written for the benefit of the insurance industry."

Still, insurers say there's plenty in the Baucus bill that makes them nervous. Here's a closer look at some key components affecting insurers:

- The individual mandate: Baucus' bill requires all Americans without health insurance to buy it, starting in 2013, and creates tax penalties for those who don't. The original bill had penalties ranging from $750 per person to $3,800 per family.

But an amendment attached in committee Oct. 1 trimmed those penalties down to zero in 2013, $200 per adult in a household in 2014, $400 per adult in 2015, and up to $750 per adult by 2017.

Insurers say the original mandate wasn't that strong anyway, and that the new, lighter penalties make it all but unenforceable.

"If the mandate is not strong enough, why would a healthy 24-year-old buy insurance if they're not buying it today?" says Frank Cote, senior director of government relations for Blue Cross and Blue Shield of Montana, the state's largest health insurer. "The fear of any insurer is if the mandate is not strong enough, then the new mix of insured will be mostly unhealthy people - and that will increase the cost of insurance."

- Health insurance reforms: Starting in 2013, the bill says insurers cannot deny coverage based on pre-existing health conditions or cancel anyone's policies for health reasons. Insurers think these changes are fine - as long as everyone is required to buy health insurance.

Without such a mandate, they say, many of the industry's new customers will be the less healthy, which will increase the cost of insurance for everyone.

- Rating ratios: In many states, including Montana, there's no limit on how insurers can price or "rate" their policies for people, according to age or other factors. The Baucus bill limits age rating at 4-to-1, meaning a policy for an older person can't be more than four times the price for a young person.

Insurers say 5-to-1 age ratios are not uncommon in Montana, but that squeezing it lower than 4-to-1 would drive up the price more for younger customers - something they don't want to do.

- Taxes on insurers: The bill imposes a new tax on insurance companies next year, based on how many customers they have. Similar taxes are in the bill for drug manufacturers, medical suppliers and medical laboratories, totaling $13 billion a year nationwide.

Montana Blue Cross officials say the taxes ultimately will be passed on to customers, thus further increasing the cost of insurance policies. They also say it could unfairly affect nonprofit insurers like Blue Cross, because they tend to have a lower margin.

- Selling health insurance across state lines: A longtime goal of some health insurers is being able to sell one policy across state lines, rather than having to tailor separate products to meet each state's regulations.

The Baucus bill allows sale of interstate or national plans, with uniform benefits. However, it says state legislatures must decide whether their state could participate in regional plans, and that legislatures could bar the national plan from being sold in their state.

Montana insurers have mixed views of these changes. Some say it's a way for national insurers to avoid state requirements for coverage, and thus unfairly undercut in-state insurers. Others say with a national plan, it would be harder to filter out higher-risk customers, so local companies could compete.

- No public option: Of course, the Baucus bill does not include a government-run "public option" insurance plan that would compete with private insurers - a proposal very much opposed by the insurance industry.

In its place, the bill allows the formation of interstate, nonprofit health cooperatives that could offer insurance to their members. However, they can't even start forming until mid-2013.

- Health insurance "exchanges": The bill requires states to set up a health-insurance "exchange," which is an Internet clearinghouse where people can shop for policies on the individual and small-group market. The bill also would set minimum benefit standards for a range of policies, from low ("bronze") to high ("platinum").

Insurers like the exchanges, saying it should promote competition by giving consumers an easy way to compare standard policies and their prices.

"It's a matter of a level playing field and transparency," says Dr. Fred Olson, chief medical officer for Montana Blue Cross. "That's something that would be hard to argue isn't good."

Kibbe, of New West, says he wouldn't mind seeing the exchange expanded, to allow anyone to shop on it and buy a policy they can carry from job to job.