New analysis of Regence rate filing
If Regence BlueCross BlueShield’s proposal is approved, small businesses will see rates rise 8.0% on average, with some jumping more than 15% in the next year, according to a new analysis by OSPIRG Foundation’s Health Insurance Rate Watch project.
“We’re seeing some family premiums reach $2000 per month and beyond,” said Laura Etherton, OSPIRG Foundation’s health care advocate. “Small businesses are hanging on by their fingernails at this point.”
Regence will defend its proposal at a public hearing today in Salem. Enrollment in the insurer’s small business plans is now less than 48,000 members, down over 10% since its filing last spring.
Key findings in the OSPIRG Foundation analysis include:
• The insurer may be over-estimating medical cost increases. Regence’s actual claims costs have gone up only 3.6% in the previous year, but it says it expects medical costs to increase by 10.8% next year.
• The impact of the rate increase on small businesses isn’t clear. For example, while some businesses will see rate increases exceed 15%, it is unclear what the maximum rate increase could be.
• Regence has not explained why it wants to have businesses with older employees, and in certain locations in Oregon, pay even more.
“This is a significant rate hike for many small businesses,” said Etherton. “As it stands right now, we are concerned Regence has not fully justified this increase.”
OSPIRG Foundation does agree with Regence on a key point – that the key to stabilizing enrollment is in making insurance more affordable.
Etherton urged all insurance companies to redouble efforts to cut costs – not by raising deductibles and cutting care – but by cutting waste and focusing on prevention.
More information on today’s public hearing is available on the Oregon Insurance Division’s website: http://www.oregonhealthrates.org/?pg=public_hearing.html
Consumers and small businesses can read the Regence rate hike proposal and post a comment of their own. The deadline for public comments is January 10, 2012.
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. More recently, the Insurance Division has begun to hold public hearings on significant rate increases.
OSPIRG Foundation’s Health Insurance Rate Watch project provides analysis and comments of health insurance rate filings from a consumer perspective. The project’s advisory committee includes small business and consumer experts such as AARP-Oregon and Consumers Union.