Health insurers’ expected hikes highlight tensions with state law
Inflation and medical care trends are driving some Oregon commercial health insurers to seek big premium increases for 2023, even as the state ramps up a program to curb health care spending growth.
Oregon’s commercial health insurance companies want average premium increases of 6.7% in the individual market and 6.9% in the small group market used by small businesses, the Department of Health announced Monday. of Consumer and Business Services.
A new program mandated by law to curb the growth of health care costs will try to limit the increase in health care spending per capita to 3.4% per year, once it is fully implemented in 2024, state officials said. Until then, he will have no teeth.
Yet the large gap between insurers’ projected costs for 2023 and the growth target set at the start of 2020 highlights the strain created by the pandemic, which has led to skyrocketing personnel costs in much of health care over the past two years.
Among the largest requested premium increases submitted to the consumer agency is an average of 12.6% by PacificSource Health Plans in the individual market, in which the Springfield company had 25,000 members at the end of 2021. There are also a 10% average requested by Portland-based Providence Health Plan in the small group market, where the company had 45,000 members at the end of last year.
Inflation, medical trends and enrollment changes were factors driving the requests, the department said. The agency is seeking public comment and, over the next two months, will review applications and make a final decision in August.
Individual and small group markets make up only a fraction of the state’s population, but they often serve as a barometer of greater pressures on health care costs.
Oregon’s new spending cap system, called the Sustainable Health Care Cost Growth Target, is a program of the Oregon Health Authority that is being rolled out gradually. The first crackdown could come in 2024, when the state will review 2023 spending by insurers and major providers and possibly offer them “improvement plans” if their per capita spending growth exceeds 3.4%, a report said. said Sarah Bartelmann, program manager. .
If insurers or providers consistently exceed the cap without a reasonable explanation, the state could fine them.
This system is separate from the consumer agency’s pricing system, said consumer agency spokesman Jason Horton.
“Our goal … is to avoid approving rates that would result in financial penalties for (insurers), but the two are entirely separate regulatory processes,” he said.
State law directs the agency to set premiums that are reasonable in relation to benefits provided, cover the cost of claims, and are not unfair or excessively high.
As the Oregon Health Authority steps up its analysis of provider and insurer spending, the agency will provide this information to the consumer service in future years for possible use in setting rates, Bartelmann said.
She pointed out that the health authority’s program looks at the total spend of insurers and providers — from health services to administrative costs and profits — while the consumer agency’s pricing focuses on premiums.
By the end of 2021, some 167,000 Oregonians were covered by individual policies and 165,000 by small group policies. The vast majority of Oregon’s more than 4 million residents are covered by other policies: large group insurance plans negotiated between insurers and employers, and the government’s Medicare and Medicaid programs – the latter being known as the Oregon Health Plan.
In Oregon’s individual health policy market, six companies submitted requests for rate increases ranging from an average of 2.3% to 12.6%, for a weighted average increase of 6.7%, the state said. In the small group market, nine companies submitted requests ranging from no change to an 11.6% increase, for a weighted average increase of 6.9%, the state said.
Even without these hikes, Oregonians will see increased premiums due to the expiration of temporary subsidy increases for individual plans purchased through the Federal Marketplace website. The special federal grants, implemented as part of economic relief during the COVID-19 pandemic, have helped reduce monthly premiums by an average of 46% since their enactment in 2021, according to the state.
Oregon Insurance Commissioner Andrew Stolfi said he’s glad so many insurers are offering plans.
“Oregon continues to have a strong and competitive insurance market, with four carriers offering statewide plans and Oregonians in most of our counties having five or six carriers to choose from,” Stolfi said. , who is also the state director. consumer department.
Highlights of the average rate increases requested in the individual market include:
- Kaiser Northwestern Foundation Health Plan (39,000 members as of December 2021): 4.7% increase, bringing the monthly premium for a Portland-area Silver plan for a 40-year-old male to $460.
- Moda Health Plan (32,000 members): 5.8% increase, increasing Portland’s Silver plan premium to $454.
- PacificSource (25,000 members): 12.6% increase, bringing the premium to $507.
- Providence Health Plan (52,000 members): 7.5% increase, raising premium to $479;
- Regence Blue Cross Blue Shield of Oregon (19,000 members): 4.6% increase, bringing premium to $451.
Highlights of average asking rates for small groups include:
- Kaiser (28,000 members): 3.9% increase, bringing Portland’s silver bonus to $348;
- PacificSource (10,000 members): 4.2% increase, bringing premium to $385;
- Providence (45,000 members): 10% increase, bringing the premium to $379;
- Regency (64,000 members): 7.4% increase, bringing the premium to $385
- United HealthCare Insurance Co. (10,000 members): 9% increase, bringing premium to $446
Virtual public hearings on the 2023 health insurance tariffs will be held on July 27 and 28. A web address for the public hearings will be posted on oregonhealthrates.org. Each insurance company will provide a brief overview of its rate applications, answer questions from the division and hear comments from the public, the state said.
Residents can submit comments online through oregonhealthrates.org and at public rate hearings.
You can reach Christian Wihtol at [email protected].