The largest commercial health plan in Oregon wants a 22.1 percent average increase
May 3, 2011 – The Oregon Insurance Division announced today it plans to hold a rare public hearing for a proposed 22.1 percent average premium increase on Regence BlueCross BlueShield individual plan holders.
The rate increase would affect nearly 60,000 policyholders, the largest pool of individual members in Oregon.
The state agency ordinarily does not hold public hearings on rate requests, but this particular request is significant both for its size and the number of people it potentially affects, said Cheryl Martinis, insurance division spokesperson.
“We’ve had unprecedented interest in our rate review process,” Martinis said. “We’ve received recently some fairly low rate requests. Right now, this Regence request really stands out.”
Regence spokesperson Scott Burton said the company welcomes the public hearing and that it's doing everything it can to hold down rates.
"Health care costs for our individual pool are increasing, while the number of people sharing the burden of those costs is shrinking," Burton said by email. "As a result, rates continue to rise. The rates we have requested in this filing are a direct reflection of these costs."
A bill sponsored by Sen. Chip Shields (SB 717
) would require the division to hold a public hearing for any rate request of at least 7 percent and affects at least 1,000 people. In testimony about the bill, Teresa Miller, insurance division administrator, said she was concerned about the cost. The bill had a fiscal impact of about $400,000 and has been referred to the Joint Ways and Means Committee for consideration.
Regence individual plan holders have been through a lot in recent years, absorbing a series of double-digit rate increases along with benefit reductions that should have presumably held down costs. As a result, healthier people have likely dropped out of the pool, leaving the sickest and costliest who are unable to switch health plans.
With this latest rate request, Regence says it will draw just a 1.1 percent profit margin on its individual line of business.
“Good for them for scheduling a hearing on this,” said Laura Etherton, a lobbyist for the Oregon State Public Interest Research Group, which plans to testify at the hearing.
The hearing will be from 4:30 to 7 p.m. on June 2 at University Place, PSU. Once Regence outlines its proposed increase, public testimony will be accepted.
The division already has a 30-day public comment period for all rate requests and posts all insurance company documents related to rate requests on its website. Consumers who cannot attend the hearing can still comment online, as usual. Once the comment period closes June 15, the division will review all filing documents and public comments and make its decision. It can approve or deny the request or approve a lesser rate.
The division approves rates for individual plans purchased by the self-employed and others who are not covered through an employer, small employer (50 or fewer employees) plans and portability coverage for some Oregonians who are leaving group coverage. About 12 percent of Oregonians have these types of plans.
Staff must find that a rate is reasonable in relation to the plan’s benefits – in other words, that the policy is fairly priced. The department looks at such factors as the recent and future costs of medical care and prescription drugs, the company’s financial strength and administrative costs, and the company’s overall profitability.
For more information
To review and comment on recent rate requests click here. http://www4.cbs.state.or.us/ex/ins/filing/
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