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OSPIRG Urges State Mandate, New Exchange To Boost Insurance Enrollment

April 17, 2019

With Oregon’s individual health insurance exchange facing lower enrollment and higher premiums, a prominent consumer watchdog group is pushing for several policy changes to stabilize the individual market and rein in costs.

Steps like a mandate for Oregon residents to buy health insurance and relief for exchange customers who earn too much to receive tax credits under the Affordable Care Act could help reverse premium hikes that have shot up amid attempts by the Trump administration to roll back the law, OSPIRG, the Oregon State Public Interest Group, argued in a report released Wednesday.

The report, “A Better Health Insurance Market for Oregon,” lists ambitious steps to improve the health insurance system for the roughly 120,000 Oregon customers who buy their insurance through the state individual market set up through the Obama-era Affordable Care Act.

Premiums on the exchange in Oregon are 9 percent higher on average this year than last, according to data from the Kaiser Family Foundation, which also found a 5 percent enrollment reduction this year compared with enrollment for 2018, the first such decrease in the exchange’s history.

“We did see rate increase requests last year as high as 10 percent, where (insurers) attributed the full 10 percent increase to uncertainty around the individual mandate repeal,” said Mark Griffith, who heads OSPIRG’s health care lobbying efforts.

But other factors are pushing premiums upward for Oregon consumers and lowering participation, OSPIRG says, from the Trump administration’s elimination of federal cost-sharing reduction subsidies to insurers to the expansion of short-term health plans and their potential to pull healthier Oregonians out of the exchanges.

Insurers are required to provide plans to low-income customers whose tax credit subsidies rise along with premiums. So the elimination of cost-sharing payments has insurers raising premiums on so-called “silver” plans, the second cheapest on exchanges and those often selected by consumers just above the cutoff line at 400 percent of the federal poverty level to receive subsidies. The practice is known as silver loading.

“People who don’t get subsidy assistance don’t have realistic choices” for affordable care, Griffith said. Lower premiums entice healthier residents to purchase insurance and offset the higher costs of sicker consumers. If this year’s individual market enrollment decline continues, more healthy plan holders could flee the exchanges and raise prices even further, raising insurers’ per-customer costs and causing premiums to spike even further.

“Getting everybody covered affects things in multiple ways, but the big thing is making sure we’re not seeing large levels of uncompensated care or people avoiding the doctor because they don’t have insurance, not getting preventive care and ending up with higher-cost interventions down the road,” Griffith said.

The group’s report urges the state to look at ways to protect consumers above the tax credit cutoff line, exploring steps like a state mandate and a restriction on silver loading that could enable customers to buy cheaper individual plans off the exchange. About 54,000 Oregonians currently buy individual health insurance outside the exchange, according to state data.

The report also recommends changes to the state’s reinsurance program to reduce rate increases, with more emphasis on patients facing high-cost medical conditions.

A final recommendation -- switching Oregon’s online health exchange from the federal platform to a state platform -- could prove a controversial sell to lawmakers wary of repeating the costly failure of Cover Oregon’s online marketplace. In 2014, state officials announced they were scrapping Oregon’s $300 million exchange and switching to the federal platform.

Nevertheless, Griffith said other states have made improvements to their online market networks since they were first launched in 2012. At the same time, federal fees the state of Oregon and insurers pay to operate on the platform hit about $16 million last year and are expected to reach between $25 and $30 million in 2019, the report said.

“The difference now (since Cover Oregon) is there are a number of companies that have been doing this for years, running successfully for years and in a number of states,” Griffith said. “If we’re doing a (request for proposals) for the state, some of these contractors are going to come in and the competition will lead to some really good options.”

Have a tip about the health care industry or legislation? You can reach Elon Glucklich at [email protected].