Oregon Regulators Stand Up to Insurers
It's a great day for consumers and small businesses, said State Sen. Chip Shields
The new rules solidify aspects of House Bill 2009 passed by the 2009 Oregon Legislature that require insurers to disclose more information about expenses and give regulators more authority to consider whether premium hikes are justified.
“Consumers now will be able to see everything their health insurer provides the state when they request a rate change,” said Teresa Miller, administrator of the Insurance Division. “We look forward to providing even more information to Oregonians about potential rate changes and receiving their input through a new public comment process.”
Oregon’s five largest health insurers along with the national trade group, America’s Health Insurance Plans, argued in comments to the Division that the new rules would expose trade secrets, harm competition and increase rates.
Several implied they might sue. A representative for LifeWise called the rules unconstitutional, but none put it quite as succinctly as Theresa Neibert, manager of regulatory advocacy and consulting for Kaiser.
“These new rules will invite instability, confusion, uneven treatment of carriers and litigation,” Neibert wrote. “This may embroil the division in costly litigation.”
The Insurance Division basically called their bluff.
State Senator Chip Shields (D-Portland) said it’s a great day for consumers and small businesses. “I’ve been very impressed with Teresa Miller’s leadership on this,” said Shields, who was a vocal supporter of the new regulations. “It took a lot of courage to say no we need to have complete transparency with these rate filings.”
In Oregon, health insurers must justify premium rates for individual, small group (2-50 employees) and portability plans. The state does not have authority over large group or self-insured health plans, which insure the majority of Oregonians.
Rate filings were made public starting in 2006, but consumer advocates who've tried to challenge premium increases since then have faced difficulties because insurers were allowed to redact key information. A case against a 26 percent increase on Regence individual health plans in 2008 is still ongoing.
Shields urged consumer groups to make use of the full public disclosures and push back against excessive health insurance hikes. “This allows every day people and consumer groups to contest those rate increase which would not be possible if they are able to redact and hide the information,” Shields said.
New rules adopted today put in place reforms passed by the 2009 Legislature. These include:
- A 30-day period for the public to comment on rate requests. To learn more click here
- More detail about what insurers spend on salaries, broker commissions, marketing and advertising and other administrative expenses.
- Ability to consider an insurer's overall profitability rather than just costs for a particular type of insurance such as individual health plans.
For related stories on rate regulation click here.
To review rate requests click here.
To read the Division's press release click here.
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Yes, Regence had its rate increase scaled back from 25% to 16%. It appears that one response is a reshuffling of their plans (i.e. canceling existing plans and creating new ones) and, for the most part, decreasing benefits. So there you go. While the state consumer agency has some say in rate increases, what say do they have in approving changes (i.e. decreased benefits) in Regence's revised medical plans?
Government and regulators can be just as greedy and power hungry as business. I don't why so many people are so trusting of government. I don't trust business or government. I want the power to be with the individual patient or consumer.
I am more and more concerned about the burden of heavy regulation on insurers and providers. Despite the seemingly good intentions, increased government oversight has the unintended result of higher administrative costs and less choice for consumers.
The consumer needs to be in control - not employers, not doctors, not government nor insurers. That is the only way we will reduce costs. Give me the power to choose and walk away if I am dissatisfied. There has to be innovation and options for me as a consumer to have the power to choose.
This has become clear to me after working in the industry for over 20 years in numerous sectors and managerial positions. Unfortunately, the momentum is more government control with the promise of security, lower costs and better health. I would love to believe this but I don't trust them.
It may make some feel warm all over to impose greater regulation on insurers because they are such evil leeching profiteers. More regulation may be the only acceptable answer to a failed status quo, but it is a mistake to aggressively regulate one segment of the system while other segments remain unregulated. If the premiums, expenses and profits of insurers need to be regulated, doesn't the supply, fees, and revenues of providers need similar regulation for the underlying economics to work? Some suggest that California's energy crisis a few years ago was aggravated by a public policy of highly regulating the retail aspects of energy pricing with a free market policy at the wholesale level.
The future of private insurance and the commitment to universal coverage are linked. If we are to commit to universal coverage, there is not a lot of sense in preserving traditionally underwritten private insurers, each calculating how to select for the healthiest membership. It also does not make sense to create another bankrupt public entitlement without the proper financial discipline.