July 9, 2012 — More than 52,000 Oregonians with individual health insurance plans will see rate hikes of 9.6% on average, and as high as 16.4%, if the premium rate hike posted today by Regence BlueCross BlueShield goes forward.
At the same time, customers in lower-deductible plans will face out-of pocket costs starting at $2,500 before coverage kicks in, and consumers in the Portland metro area may need to change providers.
“Consumers are fed up with paying more and more, and getting less and less,” said Jesse O’Brien, OSPIRG Foundation Health Care Advocate, “Before any rate increase is approved, Regence ought to show it’s doing everything it can to lower costs – not by cutting care and raising deductibles – but by cutting waste and helping Oregonians stay healthier.”
OSPIRG Foundation’s Health Insurance Rate Watch Project will analyze the Regence filing to scrutinize Regence’s justification for raising rates while cutting benefits, and submit comments to the Oregon Insurance Division of the Department of Consumer and Business Services. If approved, rate increases and plan changes would go into effect in December 2012.
“Health insurance companies could be lowering costs by cutting administrative waste, driving a hard bargain with hospitals on prices, paying doctors to keep people healthy rather than to order expensive treatments, and passing on those savings to customers,” said Jesse O’Brien, “But too often, they just keep raising rates and out-of-pocket costs for consumers.”
In May, Regence announced network changes that would have drastically cut the number of providers available to its customers in the Portland metro area, forcing many Oregonians to choose between switching doctors and facing much higher costs for basic care. In June, Regence altered course in response to a widespread consumer outcry, significantly scaling back but not entirely reversing these network cuts.
According to today’s filing, Regence plans to require its Portland metro area customers to choose between five provider networks: Adventist, Legacy, OHSU, Providence, and Tuality. Regence then plans to charge its customers significantly different premiums depending upon their choice of network. With those electing Providence facing a rate increase more than five times larger than those electing Adventist, OSPIRG Foundation’s analysis will scrutinize Regence’s justification for these differences and the potential effects on consumers.
OSPIRG Foundation’s analysis will also examine ongoing stability questions, given the plummeting enrollment in Regence’s individual plans. The insurer lost almost 7,000 customers in the individual market in the past year, and anticipates losing another 11,000 customers by the end of 2013, according to the rate filing.
OSPIRG Foundation will share its findings with state officials and the general public, and encourage the public to participate in Oregon’s rate review process. The Oregon Insurance Division has announced that the rate filing will be subject to a public hearing to be held at 3:00 PM on July 30th at the Labor and Industries building in Salem: 350 Winter St. NE, room 260.
Regence’s rate filing documentation can be viewed here.
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. Last year, the Insurance Division began to hold public hearings on significant rate increases.
Since these changes have taken effect, the Oregon Insurance Division has significantly stepped up their scrutiny of health insurers’ rate hike requests. Since 2010, it made cuts to a majority of requests, putting over $37 million back into consumers’ pockets. Last year, Regence customers saved $12.5 million when the Insurance Division scaled back a proposed rate hike from 22.1% to 12.8%.