Accountability in Action

OSPIRG Foundation

Close scrutiny of proposed health insurance premiums for 2014 has cut over $69 million in waste and unjustified costs from premiums for Oregon consumers and small businesses.

This brings the total waste cut by Oregon’s rate review program to over $155 million since 2010, providing more evidence that Oregon’s effort to create accountability for health insurers is starting to pay off. 

It also comes as Oregon begins looking at the next steps needed to cut waste from health care costs more effectively. With studies continuing to show that a third or more of all health care spending is spent in ways that do not improve health,it is clear that more work remains to be done. In the year ahead, at the urging of Governor Kitzhaber, Oregon will be exploring a range of measures to strengthen the health insurance rate review process.

Oregon’s health insurance rate review program, administered by the Oregon Insurance Division (OID), serves as a critical backstop to protect Oregon individuals, families and small businesses from paying unreasonable premium rates. Insurers offering coverage in the individual and small business markets must justify proposed premium rates in writing, showing that they are not excessive and explaining how the insurer is working to reduce costs. These written justifications are made publicly available on the OID’s website, www.oregonhealthrates.org, and the public has opportunities for input through public comments and hearings.

With federal health reform bringing important new consumer protections into effect in 2014, many more Oregonians will be able to access coverage, and health insurance benefits and out-of-pocket costs will change substantially for many people. Oregonians will be able to compare plans through Cover Oregon, the new health insurance marketplace.In addition, insurers will no longer be allowed to deny coverage to people with pre-existing conditions, and many Americans will be required to have health coverage or pay a penalty. These changes made it more important than ever to ensure that premium rates for the coming year are justified, and that consumers receive good value for their premium dollar.

Due to provisions of the federal Affordable Care Act (ACA) and Oregon’s homegrown health reform efforts, all insurers participating in the individual and small group markets must now submit their proposed rates at the same time each year. Oregon’s insurers simultaneously filed their proposed rates on April 30.

OSPIRG Foundation contributed to the process of reviewing these rate proposals by conducting independent in-depth research into the insurers’ filings, focusing especially on proposals from five of Oregon’s largest insurers: Providence, Kaiser, LifeWise, Moda and BridgeSpan.Our analysis highlighted some areas of concern for consumers in the insurers’ justifications for their proposed rates—some unique to those insurers, others true almost across the board. We brought our concerns to the attention of the OID and encouraged the public to participate in the rate review process by submitting public comment.

In late June, the OID began to hand down its decisions about 2014 premium rates, and in many cases they appear to have agreed with the concerns raised by OSPIRG Foundation, cutting most proposals back, some by more than a third.

(For a detailed breakdown of the rate decisions and OSPIRG Foundation’s recommendations for next steps, download the report–see above.)