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The Oregonian

Can Regence justify its rate hike? A public hearing will shine needed light

We don't know whether Regence BlueCross BlueShield of Oregon can fully justify the whopping 22.1 percent average premium increase it seeks for nearly 60,000 Oregon consumers with individual policies. We're not actuaries.

But one thing is clear: It's lonely out there in the individual insurance market, where there's no safety in numbers. You'd think legislators would look at skyrocketing individual rates -- not just this year, but each of the past five years -- and their first instinct would be to side with consumers.

You'd be wrong. Prodded by insurance company lobbyists, too many lawmakers are keeping a distance from proposed legislation that would pull insurance rate-setting into the full light of day.

Oregon lawmakers are considering bills that would establish public hearings for major rate increases and require an outside actuarial opinion to test the assumptions and projections of insurance companies and their regulators at the Oregon Insurance Division. Those are long-overdue steps.

Of course, insurers don't want the additional scrutiny and hassle, or worse, the awkwardness of standing up in front of crowds of frustrated consumers and defending double-digit rate increases year after year.

Regence executives are about to have just that experience. The Insurance Division has taken the unusual step of setting a public hearing on Regence's proposed increase; it will be held from 4:30 p.m. to 7 p.m. on June 2 at University Place, 310 SW Lincoln, on the campus of Portland State University.

A public hearing is a fine idea, but there's reason to wonder whether this single hearing, with no other changes in law or practice, will be especially productive. We've heard Regence's case for a rate increase; the company makes a strong argument that its 22 percent hike is justified by substantial increases in cost of health care, the cost of new benefits linked to health reform and five straight years of underwriting losses for individual policyholders.

How can consumers, especially individual policy holders, effectively challenge those arguments? OSPIRG has been a consistent advocate for consumers, but otherwise few business or advocacy groups get engaged in the rate-setting process.

That's sharply different from the gauntlet utilities must run to win approval of higher rates from the Oregon Public Utility Commission. It's not just the required hearings that make the PUC system more effective in holding down rates. Utility customers are represented in rate hearings by fierce and well-organized advocates, including the Citizens Utility Board and industrial power users.

It's true that the Oregon Insurance Division has made strides in opening up its own rate-setting process. Anyone with an interest and a computer, for example, can find at the agency's website the full case file on the Regence rate application. And it's also true that Oregon has, at least compared to most states, enough providers that competition helps keep some check on rates.

But that's not the same thing as establishing a system in which consumer and business groups can be full participants in the insurance rate-setting process, and invited to flyspeck rate hikes and comment in planned hearings. That's the truly open and transparent rate-setting process Oregon needs.

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