Today, the Oregon Insurance Division—the state’s insurance regulator—announced its decisions on health insurers’ rate proposals for next year. These decisions come after OSPIRG Foundation’s in-depth analysis raised numerous questions about some of the larger proposed rate increases, including proposals from Moda, PacificSource, United and Health Net. Over 4,000 Oregonians also weighed in with public comment.
Oregon’s health insurers must get permission from state officials before they can raise premiums on individuals and small businesses. For several years, OSPIRG Foundation has put a magnifying glass to premium hike proposals, and thousands of OSPIRG members have emailed and called the state’s Insurance Division. All this additional scrutiny has helped cut over $155 million in waste from health insurance premiums since 2010.
We are just beginning our analysis of today’s decisions, but here are some of our findings so far:
- The Insurance Division shared our concern that few of Oregon’s insurers had a workable plan to pass along the savings from reductions in uncompensated care for the uninsured due to the expansion of access to health coverage under the Affordable Care Act (ACA). In the past year, 400,000 Oregonians have signed up for coverage under the ACA, and we have already started to see rates of uncompensated care go down. Since commercial insurers wind up footing the bill for uncompensated care, this reduction should be reflected in reduced premium rates, but few Oregon insurers incorporated these savings into their rates. The Oregon Insurance Division took corrective action and cut many insurers’ proposed rates by 2% to ensure that they accurately reflected the changes underway in health care in Oregon.
- Many of the largest proposed rate increases were scaled back. PacificSource, which initially proposed a 15.9% increase—and walked that back to 10.8% shortly after—will only be raising rates by 3.9%. Moda’s proposed 12.5% increase will be cut back to 10.6%, largely on the basis of reductions in uncompensated care.
- For many Oregonians, rates will be going down. The Insurance Division estimates that the average premium for a 40-year-old Portlander on the Oregon Standard Silver plan will go down by about $12 per month, and many Oregonians will see rates decline by 10% or more. For Oregonians who have seen rate increase every year for decades, this is a welcome development.
It’s important to note that many Oregonians will still see large rate hikes. Many of Moda’s over 95,000 customers in the Individual market will still be facing a double-digit increase.
However, just as it’s important to shop before you buy health insurance, it’s important to shop before you renew coverage, especially if increasing rates are putting a strain on the pocketbook. Now that insurers can no longer turn anyone down due to a pre-existing condition, it’s easier than ever to switch plans, and many Oregonians may find better prices for better coverage if they shop around.
We’ll continue analyzing the rates announced today, and the impact they’ll have on Oregon individuals, families and small businesses, and we’ll be sure to let you know what we find.