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Oregon health insurers seek significant rate hikes

By Elizabeth Hayes, Portland Business Journal

Oregon health insurers are asking to raise rates by double digits in the individual market next year.

The requests come amid an uncertain environment where the federal government may dismantle the Affordable Care Act.

Providence Health Plan, which has by far the most members in the individual market at 103,000, is requesting a 20.7 percent rate hike, according to Department of Consumer and Business Services’ Division of Financial Regulation.

Moda Health Plan, the former market leader which now has 50,000 members, is asking for a 13 percent hike. Regence BlueCross BlueShield of Oregon is asking for a 18.7 percent hike in the individual market.

PacificSource Health Plan is asking for the most modest hike, at 6.9 percent. Kaiser Foundation Health Plan of the Northwest and Health Net Health Plan of Oregon are asking for increases of 12.4 and 12.5 percent respectively.

REQUESTED RATE HIKES FOR 2018

  • Atrio Health Plans: 21.8 percent
  • Providence Health Plan: 20.7 percent
  • Regence BlueCross BlueShield of Oregon: 18.7 percent
  • BridgeSpan: 17 percent
  • Moda Health Plan: 13 percent
  • Health Net Plan of Oregon: 12.5 percent
  • Kaiser Foundation Health Plan of the Northwest: 12.4 percent
  • Pacific Source Health Plan: 6.9 percent

Source: Department of Consumer and Business' Services Division of Financial Regulation

Eight companies submitted requests, fewer than recent years after the departures or demise of four carriers due to financial pressures mainly stemming from high claims and less assistance from an Affordable Care Act risk reduction program than they anticipated.

The requested hikes are actually less than recent years. Rates increased an average of 23 percent in 2016 and 27 percent in 2017 in Oregon’s individual market.

In terms of raw numbers, Atrio Health Plans would have the highest rate, at $477 a month, if its 21.8 percent rate request is approved by the Division of Financial Regulation. Providence would still have the lowest rate, at $468 a month.

That rate would apply to a 40-year-old individual living in Portland who buys a mid-level “silver” plan.

Companies are required to reflect the average cost of providing health care to a member in Oregon when calculating their rates. The average cost of paying claims in the individual market in 2016 was $384 per member per month, according to DCBS.

Carriers are not supposed to factor in general uncertainty, despite the very uncertain future of President Obama’s signature health care law.

A repeal and replacement bill passed the U.S. House and is currently pending in the Senate. An earlier version would have led to 24 million people losing coverage, many from a scaling back of Medicaid.

“We know there are still many unknowns facing insurers and consumers as we look ahead to 2018,” Insurance Commissioner Laura Cali Robison said in a statement. “Now that the filings are in, we will begin our vigorous review to ensure the proposed rate changes, including the potential impact of various sources of uncertainty, are actuarially sound and justified.”

Among those unknowns are how proposed Republican changes to tax credits would work for individuals who buy their own insurance, as well as the future of “cost sharing” subsidies to help lower-income consumers cover out-of-pocket expenses and the mandate that individuals be required to have insurance.

The state insurance division is pushing for legislation that is pending in the Oregon House to give it the ability to step in in the event of sudden changes from the federal government that throw the market into disarray and potentially lead to a mass exodus of insurance companies and loss of coverage.

Most Oregon counties will have multiple health plans to choose from on and off the federal marketplace, which is where consumers can access financial help. The exceptions are Lane, Lincoln and Tillamook counties, where only two carriers filed plans, according to DCBS.

“We continue to be concerned about the level of choice for Oregonians across the state,” DCBS Director Patrick Allen said in a written statement. “In the coming weeks, we will be exploring our options to ensure all Oregonians have access to plans that fit their needs.”

The requested increases in small group rates were much lower than the individual market requests, ranging from 2 percent to 8.5 percent. Ten companies submitted requests in all.

The Division of Financial Regulation must review and approve rates before they’re final. The public will be able to submit comments as the process unfolds and hearings are held.

Preliminary decisions will be announced on Thursday, June 29, with final decisions released on July 20.