All but one insurance carrier in Oregon want to impose premium hikes on their individual policyholders, with half of those hikes in the double-digits, according to proposed rates submitted to the state this week.
The largest proposed increase comes from Time Insurance Company, which had 582 individual market enrollees as of last month. The second-largest hike comes from PacificSource Health Plans, which wants to raise premiums by nearly 43 percent. PacificSource has about 9,100 individual market enrollees. LifeWise Health Plan of Oregon, with 37,000 individual market enrollees, wants to raise premiums by 38.5 percent.
Most individual market enrollees will be affected by the rate hike proposed by Moda Health, which has far and away the largest number of enrollees: more than 101,000. Moda wants to raise premiums by 25.6 percent. If approved, that means a 40-year-old single smoker in Bend would pay $319 for a silver plan.
In a statement, Moda Health spokesman Jonathan Nicholas wrote that the company bases its rates “on the actual costs of healthcare.”
Price tends to be a heavy factor for Oregonians when choosing health insurance, as evidenced by the fact that enrollment fluctuations in 2015 roughly followed increases and decreases in premiums. Moda, for example, lost about 13,000 members between this year and last, after raising its premiums by 10.6 percent.
The Oregon Health Division, which has the final say over premiums, began reviewing insurers’ proposed rates Friday. It will issue preliminary rate decisions June 17, and final decisions July 1. In the meantime, members of the public can submit written comments at oregonhealthrates.org or they can speak at hearings that will be held June 23 to June 25.
The public has 55 days to comment on the proposed rates.
Jesse Ellis O’Brien, a health care advocate with the Oregon State Public Interest Research Group, or OSPIRG, Foundation, a Portland-based consumer advocacy group that examines health insurance rates, said the proposed rate hikes are the highest he’s seen since 2010, when the division dramatically improved the depth and transparency of its rate review process.
“This is kind of an unprecedented situation,” he said. “It’s going to put the process to the test to see if it can really deliver on its promise to Oregon consumers.”
Kaiser Foundation Health Plan of the Northwest, which has about 15,500 enrollees in Oregon, is the only carrier that wants to lower premiums. It’s requesting a 2 percent decrease.
The proposed increases to individual market policies are much higher than those proposed in 2014 for this year’s policies. The highest proposed increase last year was PacificSource’s 16 percent, which the division brought down to 4 percent.
The small group market was more varied than the individual plan market, with five carriers proposing cuts in premiums and eight proposing increases — from a 10.6 percent decrease (Kaiser) to a 22.2 percent increase (Samaritan Health Plans).
This is the first year insurance carriers have their first full year of claims data following the Affordable Care Act’s insurance mandate at the beginning of 2014, which required that all citizens either obtain insurance or pay a fine, said Laura Cali, Oregon’s insurance commissioner.
“At the end of the day, it’s not a perfect science,” she said. “Insurance companies will look at their own business, their own costs and propose what they think is their best projection of rates.”
The preliminary rate decisions on June 17 are new this year. They’re part of an effort to provide more clarity around how the division makes its decisions, Cali said.
This year, the division will also allow the public to listen in on and comment during any conference calls the division holds with carriers, if they occur, Cali said.
“I think it’s just an effort to continuously improve upon the transparency and education we’re trying to provide the public about what goes into setting insurance rates and how we review it,” she said.
Last year, Oregon’s Health CO-OP, a member-owned, nonprofit health insurance company, proposed the largest premium decrease of any carrier: 21 percent. The division said that was too low to be sustainable, and ultimately approved a 10 percent cut in premiums. The CO-OP’s director publicly disagreed with the division’s rate, but argued it had little recourse under Oregon law.
That led to the introduction this year of House Bill 2605, which would mandate preliminary rate decisions by the division, which it has already introduced, and would allow insurers to accept the division’s preliminary rate even while pursuing appeals so as to participate in open enrollment. It would also direct the division to convene a workgroup to develop a new method of dealing with situations in which the carrier and division cannot reach agreement.
The House passed an amended version of the bill, as did the Senate Health Care Committee.
This year’s rate proposal process is taking off more than a month earlier than last year’s, when health insurers put forth their proposals in early June. Cali said that’s because her office needs plenty of time to study the proposals, take them through hearings and issue final rates, which must then be uploaded to HealthCare.gov and insurers must prepare materials for open enrollment, which begins Nov. 1 for 2016 plans.
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