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State officials decided to trim Regence BlueCross BlueShield of Oregon’s proposal to raise rates for more than 52,000 Oregonians with individual health insurance plans, according to documents made public by the Oregon Insurance Division. Instead of the 9.6% rate hike proposed by Regence, the Oregon Insurance Division approved an 8.9% average increase, with some consumers seeing increases as high as 15.6%. The decision will save Regence customers $9.3 million.
“This decision will save some money for consumers,” said Jesse Ellis O’Brien, OSPIRG Foundation Health Care Advocate, “but as any Regence customer can tell you, an 8.9% increase is a major blow to the pocketbook. With Regence increasing out-of-pocket costs in addition to premiums, many customers will be exposed to greater risk of financial hardship in the case of illness.”
The decision comes after an OSPIRG Foundation analysis revealed problems and gaps in the insurer’s justification for the proposed rate hike. Regence does not appear to have resolved many of the problems identified in that analysis, according to O’Brien.
In addition, elements of the decision were based on information that was not made available to the public. The Insurance Division determined, following a closed-door meeting with Regence officials, that documents justifying Regence’s controversial proposal to alter its Portland-area provider network constituted trade secrets. “This raises questions about the transparency of the rate review process,” said O’Brien.
Key findings of OSPIRG Foundation’s analysis of the rate filing:
- Regence’s medical trend projections are not justified by the data available. Regence did not provide the quantitative data and calculations it used to establish their projections of medical costs.
- When it comes to reducing costs and improving the quality of care, it is not clear that Regence is doing all it can. With rising costs making health insurance unaffordable for many Oregonians, Oregon needs all insurance companies to redouble their efforts to contain costs – not by raising deductibles and cutting care – but by cutting waste and focusing on prevention and other proven strategies that keep patients healthier.
- As Regence continues to hike premiums, cut coverage and lose membership, its activities have an effect on the stability of the entire individual market. Regence is the largest single insurer in the individual market in Oregon. Starting in 2014, insurers in the individual market will be required to incorporate essential health benefits and other critical consumer protections. But instead of getting ready to implement these changes to ensure a smooth transition, the strategies Regence appears to be pursuing—hiking premiums and reducing benefits—seem to be moving in the other direction.
OSPIRG Foundation’s analysis can be viewed online at the following URL: http://www.ospirgfoundation.org/reports/orf/comments-regence-bluecross-blueshields-proposal-increase-individual-health-insurance
A copy of Regence’s rate filing, as well as the correspondence between the insurer and state regulators, is available on the Insurance Division’s rate review website at the following URL: http://www.oregonhealthrates.org/?B64=nZzVWZjFGdvljbo12bl1TJFJ2cvhyd1UmRpZGbul3ZmMFVUh1XFNkUGZVPHJUQlMkMxQjM1gjM0cjMmIETOF1RBV0R9UDMmEFVUh1XPNlU9Q0Qm40QC10XOl1UU9VWFBTPmA0QE10XPNlTJRlTFVVPlNXYjJCayUEMpZGbul3ZmMkUUVVVOJEV98Gat9SZyUXRoN3blcUNzZWZyF2YmgkUPR1XUNVQVRzUB1Gb%3Dw
Background on Oregon’s health insurance rate review program
In 2010, new rules went into effect strengthening the standards that health insurance companies must meet before raising premiums. Insurers must justify rate hikes in writing, showing that they are not excessive and explaining how the insurer is working to reduce costs. All rate filings are public information, available online, and open to public comment. The Oregon Insurance Division evaluates these justifications, and must take public input into consideration. Last year, the Insurance Division began to hold public hearings on significant rate increases.
Since these changes have taken effect, the Oregon Insurance Division has significantly stepped up their scrutiny of health insurers’ rate hike requests. Since 2010, it made cuts to a majority of requests, putting over $37 million back into consumers’ pockets. Last year, Regence customers saved $12.5 million when the Insurance Division scaled back a proposed rate hike from 22.1% to 12.8%.
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