The Oregon Medical Insurance Program board voted unanimously Monday to set the assessment on health insurance plans to fund its reinsurance program at $3.859 per person per month, which will bring in just under $72 million for 2014.
The reassessment program cushions the blow for insurance companies which now must take all comers, including those previously covered by OMIP’s high-risk pool because of pre-existing conditions such as HIV, cancer or heart disease.
Some of these newly insured members will have very high medical claims, and OMIP will release cash from the $72 million for any former OMIP member who has medical bills above $30,000 during 2014. The program is scheduled to run for three years and will reimburse insurance companies for claims through 2016.
“It’s to create stability in a marketplace that was otherwise seen to be volatile and all over the place,” said Chris Ellertson, an OMIP board member, representing Health Net Health Plan.
The reinsurance program marks a change in focus for OMIP, which had previously kept a reserve fund to pay claims for people who had been unable to get insurance. OMIP will continue to operate by running the reinsurance program, ensuring that health insurance companies that have former members with very high medical bills will get reimbursed through the assessment tax, which is just under $4 a month for every person who has private insurance, or $46 per year.
Insurers are assessed based on the number of Oregon lives covered, with the understanding that they will get most of their money back, on average. Kaiser Foundation Health Plan of the Northwest, which has the most Oregonians counted towards the assessment -- 282,000 -- will pay the highest amount, about $13 million. Moda Health Plan, with 269,000 lives, is second with a $12.4 million assessment. Providence Health Plan is third, with a $9.2 million assessment for 200,000 lives.
“This program was never intended to have a large reserve like there was for OMIP,” said Robin Robertson of Moda Health, the OMIP chairman.
Kaiser, Moda, Providence and the other insurers should have a windfall of money to help soften the blow of their assessment for 2014. The reserve account that paid OMIP claims remains open, and an audit is underway by Moss Adams at the offices of the account’s third-party administrator, Regence BlueCross BlueShield, to reconcile differences in accounting between OMIP and Regence, which Regence representatives said was about $10 million.
Don Myron, the OMIP administrator, said that the state should see some results from that audit during the first week in December, which is also when the next OMIP meeting is scheduled in Wilsonville on Dec. 3.
Whatever money is leftover after the account is settled will get credited back to the insurance companies that paid the assessment, topped by Kaiser, Moda and Providence. Regence has the fourth-largest insurance assessment at $7.3 million for 158,000 lives.
“The reserves are paid back on a pro-rated basis,” said Myron. “Most of these insurers would use up that credit all in the first year.”
Chris can be reached at [email protected].
