Salem -- Oregonians can now see the state's preliminary decisions for rates for 2018 individual and small employer health insurance plans. The Department of Consumer and Business Services, Division of Financial Regulation must review and approve any rates before they can be charged to policyholders.
The preliminary rate decisions are for small businesses and individuals who buy their own coverage rather than getting it through an employer.
In the individual market, the division has issued preliminary decisions for seven companies with average rate changes ranging from a 1.6 percent decrease to a 14.8 percent increase. Under the preliminary decisions, Silver Standard Plan premiums for a 40-year-old in Portland would range from $355 to $452 a month.
"Although rates are still rising for many consumers, the new Oregon Reinsurance Program provides some stability and relief," said DCBS Director Patrick Allen. "Without this program, Oregonians who buy their own insurance would be seeing much larger rate increases."
In the small group market, the division has issued preliminary decisions for nine companies with average rate increases ranging from 3.3 percent to 10.1 percent. Under the preliminary decisions, Silver Standard Plan premiums for a 40-year-old in Portland would range from $293 to $421 a month.
See the chart at dfr.oregon.gov/healthrates/Documents/2018-pre-prop-rates.pdf for the full list of preliminary decisions.
Reasons for the rate changes include:
- The new Oregon Reinsurance Program. This program reduced individual market rates by 6 percent, and added a 1.5 percent increase to the small group market.
- Federal weakening of the individual mandate enforcement.
- Medical costs continue to rise, driven by increased use and the cost of new specialized prescription drugs.
- The cost of providing care continues to surpass premiums collected for many carriers.
Developed by the Governor and stakeholders and recently approved by the Legislature, the Oregon Reinsurance Program is designed to stabilize the individual market, reduce rates, and to encourage insurance companies to offer plans in more parts of the state. Reinsurance is a mechanism to spread the risk of high-cost claims so that no one carrier takes on a disproportionate share of this risk.
Rates are required to reflect the average cost of providing health care to a member in Oregon's health insurance market. The division has determined that the average cost of paying claims in the individual health insurance market in 2016 was $384 per member per month; in 2015, the average cost of paying claims was $385 per member per month. Health insurance companies are required to justify any differences to this average in their rate filings.
These preliminary decisions will undergo continued review and discussion through public hearings being held in Salem and streamed online July 10-11. The public comment period also will remain open through Tuesday, July 11. There will be a dedicated public comment period during each public rate hearing. For a schedule of hearings and to submit comments online, visit www.oregonhealthrates.org.
Final decisions are expected to be announced Thursday, July 20.
The Division of Financial Regulation is part of the Department of Consumer and Business Services, Oregon's largest business regulatory and consumer protection agency. Visit dcbs.oregon.gov and dfr.oregon.gov.