Editorial: Rate review expansion not a sure benefit

How can Oregon’s robust and open review of health insurance premium rates possibly be bad? Let us count some ways.

Gov. John Kitzhaber asked the Oregon Health Policy Board to recommend more health care reforms for Oregon. He wants what everybody wants — the so-called triple aim of controlling of health care costs, improved quality of care and healthier Oregonians. And one solution he wants examined is enhancing insurance premium rate review.

How much then can insurance rate review deliver?

There are many good things about Oregon’s rate review. It’s similar to the review that power companies must go through. The insurance rate review is also very open.

The premium increase proposals made by insurers are available to the public. There are open public hearings. The state even pays OSPIRG, an Oregon consumer group, to act as a voice for consumers and question the technical and complex assertions in the proposals.

The state also has the authority from the Legislature to modify a requested health insurance premium increase. The state can even and has decided to require insurance companies to set their premiums so the insurer loses money on some lines of business.

There is no question that Oregon’s review process has saved some consumers money. Rate increase requests are routinely lowered.

How much closer, though, is it getting Oregon to that triple aim?

First of all, it doesn’t help everybody. Insurance rate review only covers individual and small group plans. And because it only covers those individual and small group plans, it may be increasing premiums for other consumers on commercial or large group plans as insurers make up for lower rates.

One “solution” would be to expand insurance rate review so that it covers more plans.

But rate review has other limitations. It’s about making guesses about the future based on the past. That’s part art and part science. It’s uncertain and unpredictable. And when the government gets more involved, it could drive insurers to leave Oregon’s competitive insurance marketplace.

Rate review is also an isolated attack on a complex problem of health care costs. There are so many drivers of health care costs — lifestyle choices, taxes and fees, the difficulty of turning down a patient, liability costs, consolidation of providers, research and development. Rate review won’t tame much of that.

Did you know, for instance, that at the same time the federal health reform is trying to control premiums, they include a new tax on premiums that will drive up the cost? Rate review doesn’t solve that contradiction.

Rhode Island made one of the more profound changes in its rate review. It used it as a lever to require insurers to ramp up spending on primary care. The idea being that more money spent on primary care means less health care spending on more expensive care down the road.

It’s only been a handful of years since those changes went into effect, but as Rhode Island’s former insurance commissioner told the Oregon Health Policy Board this week, “we were not appreciably bending the cost curve.”

Rate review may be relatively easy to ramp up in Oregon. That doesn’t mean it can be relied on for results.