High Risk Pool to Increase Premiums
Insurer of last resort for those rejected for individual coverage plans to raise rates by 12.5 percent
That decision was approved by a 7-1 vote of the Oregon Medical Insurance Board on Oct. 13. C.J. McLeod, senior vice president and chief marketing officer of ODS Health Plan, cast the only dissenting vote, preferring to raise rates by 15 percent similar to last year. “Otherwise we move backward,” he said.
Membership in the high risk pool dropped to 14,855 in August with fewer people signing up (376) compared to new enrollment figures dating back to June 2006. Nearly one in four applicants for individual health plans are rejected in Oregon, amounting to roughly 20,000 people every year.
Calling it a reasonable increase with the medical trend expected to climb by 13 percent next year, Tom Jovick, OMIP’s acting administrator, said, “The goal is to achieve a reasonable balance. People will be paying the same as the increase in medical costs.”
Keeping the rates equivalent to the medical trend makes sense, according to Sue Sumpter, the public member, who’s the patient services manager for the Leukemia and Lymphona Society. “This is the last port of call. If people cannot afford this coverage, there’s nothing out there for them.”
There’s also been a precipitous drop in the commercial market with small businesses dropping coverage, said Jovick. Although 1.6 million people were insured earlier this year (not including Medicare, Medicaid and federal employees), that number is expected to drop by at least 200,000 this year.
Next January, the board will assess insurers to cover the medical costs of its members. Based on the rate increase, insurers are expected to pay $42 million which will add $4.33 onto their premium rates – based on the 1.6 million member estimate.
“That assessment gets passed on one way or another,” said Jovick, mentioning a quote from Dr. John Santa, a former board member who said, ‘”At one point the assessment becomes prohibitive for the commercial market.’”
New medical conditions have also been added to OMIP’s application – blood coagulation disorder, dementia, liver failure and emphysema. Until now people with those conditions had to apply for a commercial policy and be rejected before qualifying for the high risk pool.
Currently more women are insured through OMIP (8,719 representing 57.9 percent) compared to men (6,347 representing 42.1 percent) and pay average monthly premiums of $488.
For related stories on individual rejection rates that hover around one-in-four click here.
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