Lobbying to limit health insurance rate regulation extends beyond walls of the state capitol
September 3, 2009 – Armed with authority to peer deeper into health insurance balance sheets, the state agency that governs the industry faces intense lobbying pressure.
The arguments so far, in just the first few months of a rulemaking phase that ends in January, have been over what information the general public can see. The argument comes down to trade secrets.
“The jury is still out in how the department will react,” said Rep. Chip Shields (D-North Portland), who attended the first two meetings of a rate review advisory committee along with more than a dozen insurance industry lobbyists. “Will they roll over to the insurance industry or will they say you have to present credible evidence as to why these particular things you want redacted are trade secrets. I haven’t seen anything other than theory as to why these things need to be closely held secrets.”
The rules will reflect new laws passed in House Bill 2009 to take effect April 2010. Insurance company lobbyists argue that revealing certain information publicly would be harmful to competition and consumers, factors which proven would qualify for exemptions under the law.
“You could drive a truck through the law we passed in HB 2009 if the insurance division doesn’t hold strong and do the right thing and stand up for transparency,” Shields said. “I’m very concerned that the political pressure from the insurance companies on the division will be immense.”
Lawyers for Regence BlueCross BlueShield of Oregon, for instance, argued in an administrative hearing earlier this year that its target loss ratio – the percentage of premium dollars the company intended to spend on medical care – was a trade secret.
State regulators granted it and similar public disclosure exemptions this year to four Oregon insurers -- Lifewise, PacificSource, Regence and Health Net. Two others – Providence and Kaiser – applied and later withdrew their requests. Rate filings are currently on-line, exempted material redacted.
The exemptions cover those health plans the state regulates – individual, small group and portability plans – obtained through a public records request by Larry Kirsch, an expert witness in rate review hearings across the country. Kirsch is also co-appellant in the ongoing case against a 26 percent rate increase on Regence individual health plans last year.
This week, Cory Streisinger, director of the Department of Consumer and Business Services, formally upheld the 2008 rate hike after a judge’s decision two months ago to support the department’s ruling.
Most of the public disclosure exemptions involved actuarial calculations, and few similarities existed from one request to another, Kirsch found.
“The issue clearly is what’s going to happen on the trade secret exemptions to the existing filing requirements under the new law,” Kirsch said. “It’s quite an important thing.”
Rates Continue Climbing
Health insurance rate hikes recently granted and those still pending before state regulators continue annual trends of double-digit percentage increases.
PacificSource wants to raise premiums next year on more than 11,000 individual members by 15.4 percent after receiving a 25 percent increase this year. The division hasn’t yet ruled on the latest request.
Oregon regulators contested two rate increases this year, both on Regence plans, granting a lower percentage change than the company requested. Any member affected by an increase can request an administrative hearing, but only one person, Karen Kirsch, has done so in at least the past decade. (See chart below for a complete list of rate increases.)
Insurers increased rates this year in part to offset a 1 percent tax on premiums the legislature imposed in order to extend coverage to uninsured children and low-income adults. The tax is intended to lower healthcare costs in the long term.
Lawmakers expanded what the Insurance Division could request in the rate filing next year. But lawmakers didn’t go as far as some would like.
“If they don’t stand up to transparency in a reasonable way,” Shields said, “and things are allowed to be redacted without any evidence, then I and a group of other House members and Senators are prepared to come forward with legislation in February intended to fix it.”
To review rate filings click here.
To follow the rate review advisory committee click here.
To comment on the new rules being drafted by the Insurance Division contact Sue Monson at 503-647-7272 or Anthony Behrens at email@example.com.
To file a complaint against an insurance company click here.
For more information call the Insurance Division’s Consumer Advocacy Unit at 1-888-877-4894.