On June 30, the state announced its final decisions for 2017 individual and small employer health insurance rates. The proposed rates are for plans that comply with the Affordable Care Act for small businesses and individuals who buy their own coverage rather than getting it through an employer. The Department of Consumer and Business Services (DCBS) must approve any rates before they can be charged to policyholders.
These final decisions are the result of a rigorous and public review process by the DCBS Division of Financial Regulation. This process included public conference calls, public hearings and public comment. The division published preliminary decisions before the public hearings. These hearings provided an opportunity for the public, health insurance companies and the division to further review and analyze the preliminary decisions.
Health insurance rates are an estimate of future expenses, including medical and prescription drug claims costs and administrative expenses. These estimates are based on historical data and forecasts of future trends.
The department reviews rates to ensure they are reasonable and actuarially sound – meaning they are sufficient to cover costs so that health insurance companies can pay claims, but not excessive. This year, the department found that most rates were reasonable based on projected expenses for 2017. However, there were a few exceptions, including:
* The department reduced Providence’s rate increase for individual plans from 29.6 percent to 24.1 percent. The department made the change because it disagreed with the company’s projection for health care utilization and it concluded the profit margin generated in the original request was too high.
* The department reduced Moda Health Plan’s rate increase for individual plans from 32.3 percent to 29.3 percent because of several errors, one of which was discovered by OSPIRG in its review of the filings on behalf of consumers.
* HealthNet’s rate for individual plans changed from staying flat to increasing 9.8 percent because the original request was based on data that was not credible, the department found.
In addition, based on data available after the initial submission, ATRIO requested and was able to justify an additional 5 percent increase to its rates.
In the individual market, the division’s final rate decisions range from an average rate increase of 9.8 percent to an average rate increase of 32 percent, depending on the insurance company. Under the final decisions, Silver Standard Plan premiums for a 40-year-old in Portland would range from $312 to $442 a month.
In the small group market, the division’s final rate decisions range from an average rate decrease of 8.9 percent to an average rate increase of 17 percent. Silver Standard Plan premiums for a 40-year-old in Portland would range from $266 to $362 a month.
Click the following link for a table with company-specific information: http://dfr.oregon.gov/public-resources/healthrates/Documents/2017-final-summary.pdf
“Health insurance rates should generally follow trends in the cost of medical care,” said Laura Cali, insurance commissioner and administrator of the Division of Financial Regulation. “However, there are several additional factors – such as the end of federal programs and the recent losses experienced by insurers – that make higher increases necessary for insurers to meet their obligations to policyholders in 2017.”
The final rate decisions also include plans in 13 additional counties for Moda Health Plan. Moda was one of four statewide carriers that had decided to limit the number of counties in which it sells plans in 2017. One of those carriers, LifeWise Health Plan, opted to leave the Oregon market altogether.
“We were very concerned about limited options for consumers, particularly in rural counties, and worked hard to try to get insurers to reconsider their decisions,” said Patrick Allen, DCBS director. “With Moda re-entering 13 counties, Oregonians throughout the state have multiple choices, and we are in a better position in a fast-changing market.”
Final rates, a summary of the state of the individual and small group markets, and the final decision information for each carrier can be found at www.oregonhealthrates.org. Statewide premium comparison tables for ages 21, 40 and 60 will be posted online in late July.
The Division of Financial Regulation is part of the Department of Consumer and Business Services, Oregon’s largest business regulatory and consumer protection agency. Visit dcbs.oregon.gov.