Oregon insurers prep for an uncertain 2018

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Insurance companies selling 2018 policies in Oregon have two weeks to figure out how much they’ll charge, what they’ll sell and where. That’s no easy task, given the federal government could send it all tumbling down.

“The folks in D.C. could do things that kind of essentially turn everything upside down,” said Ken Provencher, president and CEO of PacificSource Health Plans.

For the rest of us, that means prices could go up. Choices could dwindle. Or things could stay the same.

The Trump administration hasn’t said whether it will continue a program called cost-sharing reduction that provides roughly $25 million per year to Oregon insurers. Without that money, it’s unclear whether companies will raise prices, absorb the blow or leave marketplaces entirely.

At the same time, Republicans in Congress are mulling changes to the Affordable Care Act that would, among other things, let states opt out of its mandates.

The uncertainty has already prompted Oregon insurance regulators to push back the deadline for companies to submit their proposed 2018 premiums, or monthly rates, from Monday to May 15. That sets off a monthslong process in which analysts in the state’s Department of Consumer and Business Services review and tweak proposed prices, hear companies’ rebuttals and make final decisions. Prices are scheduled to be finalized July 20.

But given the sheer number of things that could happen between now and then, the process is shaping up to be a wild ride. For their part, Oregon regulators are trying to act normally and go about the price-setting process as they do every year.

“I can’t overreact until it’s actual reality, so I’d only be speculating,” said Eric Cutler, DCBS’ product regulation manager. “But we are watching this extremely closely.”

Another change that may affect enrollment this year: The federal government narrowed the window in which people can buy 2018 policies. That period will start Nov. 1, as it has in previous years, but will end Dec. 15. In the past, the enrollment period has extended until Jan. 31 of the following year.

State regulators, who can’t change that window, said it’s difficult to tell whether it will dampen enrollment in Oregon. They’re looking to what the state can do to minimize the effects of a shorter enrollment period.

Oregon market stabilizing

Insurance companies since 2014 have endured huge losses on their individual market policies, the result of sicker than expected people buying insurance under the Affordable Care Act. In Oregon alone, companies lost $217 million in 2015, mostly due to the volatile individual market. Individual market policies are plans people buy for themselves or their families.

Things may be leveling out in Oregon, however. Insurers here spent more than $1 billion on medical bills for individual policyholders in 2016, $51 million less than they spent on those members in 2015.

“I don’t want to claim victory, but we’re starting to see some stabilization trends as far as claims costs go in Oregon,” Cutler said.

PacificSource’s experience so far in 2017 is also showing signs of stability, Provencher said.

In recent years, several insurers have pulled out of Central Oregon’s individual market in an effort to rein in costs. Deschutes County faced having only two companies selling the policies here until state regulators convinced more to enter the local market.

Providence Health Plan and Regence BlueCross BlueShield of Oregon declined to say whether they will sell 2018 individual market policies in Central Oregon. Kaiser Permanente said it has no plans to extend coverage area here. Representatives with Health Net, Atrio and Moda did not return requests for comment.

PacificSource, which has sold policies in Central Oregon since the late 1990s, expects to remain in the region, Provencher said.

A side effect of having fewer choices in 2017 was the disappearance of policies, at least in Central Oregon, that let members put money into health savings accounts — tax-advantaged accounts that help people pay for out-of-pocket medical expenses their health insurance policy doesn’t cover.

That won’t be the case in 2018, Cutler said, as his office will ensure all standard bronze policies, a type of policy marketplace carriers are required to offer, will let people use their HSA accounts.

“It’s a lesson learned, I think,” he said of the lack of HSA-compatible policies available this year.

Cost-sharing payments

Perhaps the biggest lingering question mark for insurance companies is whether the Trump administration will continue to fund billions of dollars the federal government has provided each year to insurers under the Affordable Care Act. So-called cost-sharing reduction payments — which amounted to an estimated $7 billion in 2016 — reimburse insurers for reducing out-of-pocket costs for low-income members. They’re separate from the Affordable Care Act’s tax credits that help people afford their premiums.

Those payments are the subject of a lawsuit from the U.S. House of Representatives that takes issue with how they’re funded. The Obama administration had defended the payments. It’s unclear whether the Trump administration will do the same.

If those payments go away, insurers will have to eat the losses, stop selling marketplace policies or raise their prices. Molina Healthcare, which doesn’t sell policies in Oregon, has said it will leave the marketplace if the cost-sharing reduction payments aren’t funded.

The Trump administration probably won’t stop those payments in 2017, a move that would cause “absolute chaos,” but 2018 is still unclear, said Jeff Luck, associate professor of health management and policy at Oregon State University.

Since the ACA still stipulates policies must include the reduced out-of-pocket costs for low-income enrollees, cutting the payments would most likely mean large losses for insurers, Luck said.

“In either case, the losses would be so big that if cost-sharing reduction subsidies were stopped, insurers would either have to stop selling policies or raise the premiums dramatically,” he said. “There really is no middle ground.”

Ultimately, such a decision would affect consumers, Provencher said. Monthly premiums would increase by an average of 19 percent in 2018 without the payments, according to the Kaiser Family Foundation.

“It would be bad for people who depend on financial assistance to get health plans and then health care that goes with it,” he said.

U.S. Rep. Greg Walden, a Republican who represents Oregon’s second Congressional district, has defended the cost-sharing reduction payments. In a town hall meeting in Bend last month, he told attendees they need to be funded.

“It needs to happen on time,” he said. “I don’t agree with holding people’s health care hostage.”

— Reporter: 541-383-0304,

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