The Oregon Insurance Division says it is pushing health insurers to charge higher individual rates in 2016 because they are reporting huge underwriting losses for 2014.
The insurers collected just $703 million in premiums for 2014 and spent $830 million on 2014 claims, officials say.
Laura Cali, the Oregon insurance commissioner, said in her statement that the division’s mission is to protect the state’s consumers.
“That means consumers are not overcharged for health insurance, but it also means that rates must cover the cost of patients’ medical bills,” Calli says. “We have proposed increased rates in order for consumers to continue counting on the coverage they have purchased.”
Because of the 2014 shortfall, the division is now pushing five of the state’s 13 individual major medical market players to charge higher prices in 2016 than they had originally proposed, and a sixth insurer, which is new to the market to increase its initial rates.
The division has issued preliminary decisions calling for those six insurers to add adjustments ranging from 7.4 percentage points to 25.8 percentage points to their original increase requests.
Trillium Community Health Plan Inc., for example, is the insurer facing the smallest preliminary adjustment. If the Oregon division’s preliminary rate decision sticks, the company’s average 2016 monthly base rate will increase 12.4 percent, to $310. Originally, Trillium had asked to raise the monthly base rate just 5 percent, to $290.
The Oregon division left six insurers’ 2016 rate proposals unchanged. It asked one insurer, PacificSource Health Plans, to cut a proposed 42.7 percent average increase to 37.1 percent. That would set the average PacificSource monthly individual market base rate at $389.
The monthly base rate, which is officially called the index rate, is supposed to give insurers, regulators and others a simple way to make apples-to-apples comparisons of plans’ average prices.
The Patient Protection and Affordable Care Act (PPACA) puts major medical plans in four “metal level” richness categories, with bronze-level plans offering the thinnest benefits and platinum plans offering the richest benefits. The index rate is the monthly premium a 40-year-old would pay for a moderately rich silver-level plan.
Originally, Oregon insurers had asked for 2016 individual market index rates ranging from $233 to $405.
The proposed decisions would narrow the price gap between the cheapest and most expensive individual plans: from $271 to $389.
For a look at the five Oregon insurers facing the biggest regulator-imposed increased in 2016 rate proposals, read on.
5. Kaiser Foundation Health Plan of the Northwest
Average rate request: -2%
Preliminary average rate approved: 8.3%
Preliminary increase: 10.3 percentage points
Preliminary monthly index rate: $271
4. Providence Health Plan
Average rate request: 9.9%
Preliminary average rate approved: 21.6%
Preliminary increase: 11.7 percentage points
Preliminary monthly index rate: $284
3. Oregon’s Health CO-OP
Average rate request: 5.3%
Preliminary average rate approved: 19.9%
Preliminary increase: 14.6 percentage points
Preliminary monthly index rate: $274
2. Zoom Health Plan Inc.
Average rate request: New to market.
Preliminary average rate approved: 24.8% higher than requested
Preliminary increase: 24.8 percentage points
Preliminary monthly index rate: $291
1. Health Net Health Plan of Oregon Inc.
Average rate request: 9%
Preliminary average rate approved: 34.8%
Preliminary increase: 25.8 percentage points
Preliminary monthly index rate: $297