Monthly rates for individual health insurance policies in Oregon will increase by an average of 9.2 percent next year, significantly lower than the 27 percent average increase in 2017 and 23 percent in 2016.
In releasing the final rates Thursday, insurance regulators with Oregon’s Department of Consumer and Business Services said they serve as further evidence the state’s health insurance market is stabilizing, contrary to claims from President Trump and Republicans in Congress that it’s in a “death spiral.” The past two years have been tumultuous, with double-digit rate hikes and companies pulling out of rural counties or leaving the state’s market altogether.
“We are seeing signs of stability,” said DCBS spokesman Jake Sunderland.
In Deschutes County, average rate hikes on the individual market range from PacificSource Health Plans’ 2.8 percent — $455 per month for a 40-year-old in Bend with a standard silver policy — to Providence Health Plan’s 10.8 percent — $434 for the same person.
Crook and Jefferson counties will see a rate decrease of 1.6 percent among BridgeSpan Health Company policies, although those are only available outside of HealthCare.gov.
The rates are far lower than those initially proposed by insurers in May, which ranged from 6.9 percent to 21.8 percent. The latter came from ATRIO Health Plans, which has since dropped out of Oregon’s commercial market next year.
Providence, for example, wanted to sell individual policies that cost 20.7 percent more on average than this year. Regence BlueCross BlueShield of Oregon, which is selling individual policies in Crook and Jefferson counties next year, originally proposed raising its rates by an average of 18.7 percent, and will now only raise them by 2.4 percent on average.
The consumer advocacy group Oregon State Public Interest Research Group estimates the changes DCBS made to insurers’ proposed rates will save Oregonians more than $114 million in monthly premiums next year.
“It’s a pretty profound difference, and we think it’s a big win for consumers,” said Jesse O’Brien, OSPIRG’s policy director.
Oregon lawmakers’ approval of the Oregon Reinsurance Program last month resulted in a 6 percent drop in individual market rates across the board from those that had been proposed. Small and large group rates, by contrast, increased by 1.5 percent under the program.
The Oregon Reinsurance Program is designed to act like insurance for insurance companies. It places a 1.5 percent tax on insurers’ revenue and funnels that money — an estimated $90 million in 2018 — into a pool that is given back to insurers that treat extremely high-cost patients. Of the 1.5 percent tax, 0.3 percent is going toward the Reinsurance Program and 1.2 percent will help fund Oregon’s Medicaid expansion.
In Deschutes County, rates on small group policies, those small businesses buy for their employees, will increase by between 3.5 percent and 10.1 percent.
Oregonians who bought insurance under the Affordable Care Act have required more medical care than insurers expected, resulting in years of steep rate hikes. In proposing their rates in May, insurers indicated in documents to the state that’s still the case, although it doesn’t appear to be worsening.
Some carriers wrote they expect fewer healthy people to buy insurance in 2018 due to the Trump administration’s weakening of the individual mandate. The Internal Revenue Service announced earlier this year it would no longer reject tax returns that don’t contain information about health coverage in response to the president’s executive order directing agencies to minimize the economic burden of the ACA.
It’s unclear whether people will still be fined for not having insurance. DCBS estimates the weakened mandate increased 2018 individual market rates between 2.4 percent and 5.1 percent.
The Legislature also approved a new law that allows DCBS to take action in the event changes from Congress or the Trump administration destabilize Oregon’s insurance market. One example would be changing insurance rates outside of the rate review process that just ended.
“We now have very broad flexibility to take whatever action is needed to stabilize the market,” he said.
The Senate has had difficulties replacing the Affordable Care Act, but the Trump administration could still cut off billions of dollars in annual payments to insurers in the coming years. The so-called cost-sharing reduction payments, a product of the Affordable Care Act, reimburse insurers for reducing out-of-pocket costs for low-income members.
Companies have 10 days to accept the rates or request a reconsideration from DCBS. More information on each carrier can be found at www.oregonhealthrates.org.