Regence BlueCross BlueShield Defeats Efforts to Notify Consumers about Rate Hikes

Senate Bill 413 would have required insurers to inform customers of rate hikes above 7 percent, but Sen. Laurie Monnes Anderson pushed for an amendment written by Regence that only requires them to let policyholders know at sign-up that such information is available on a government website

 

March 22, 2013 — Sen. Laurie Monnes Anderson, D-Gresham, helped Regence BlueCross BlueShield and other insurers defeat a requirement that they notify consumers of pending rate hikes above 7 percent — a measure pushed by Sen. Chip Shields, D-Portland, which easily passed the Senate in the 2011 session.

Instead, Monnes Anderson supported an amendment of Senate Bill 413 written by Regence that merely requires that insurers indirectly notify consumers once a year that public information exists about rate reviews.

Rate review information is posted publicly on a website run by the Department of Consumer and Business Services’ Insurance Division, which has prior approval of all rate increases.

The heavily amended SB 413 passed out of committee unanimously, setting up a floor vote next week. Shields still supported the measure, despite the nearly total rewrite from the original bill.

Originally, SB 413 would have given health insurers three days to notify customers after they filed a rate hike above 7 percent on plans with 1,000 customers or more. Currently, the Insurance Division has 30 days to review insurers’ justifications for the increase and either approve or ask that insurers reduce the hike.

“Politics is the art of the possible,” said Shields, who wanted to respect the work Monnes Anderson had done with insurers and OSPIRG to reach a resolution. Those talks failed to reach consensus, resulting in the Regence amendment coming forward in lieu of the original bill.

“I would have preferred insurance companies notify consumers directly,” Shields said.

The notice about the information available on the DCBS website could be buried in the fine print of a policy’s explanation of benefits, according to Jesse Ellis O’Brien, the health policy advocate for OSPIRG, a public interest group.

OSPIRG proposed its own compromise amendment to SB 413, requiring a detailed informational letter and a chance for customers who sign up or renew policies to also sign up through the insurer for updates from the rate review website — www.oregonhealthrates.org.

“Insurers would send out information about the rate review process and allow customers to sign up to receive notifications from DCBS that are already available but they don’t know are available,” O’Brien said.

But OSPIRG’s amendment was quashed by Monnes Anderson in favor of Regence’s version. She told The Lund Report that O’Brien’s suggested amendment would have imposed administrative costs on insurers and was opposed to the extra paperwork that such a notice letter would require.

“We do not want to incur new costs with the Affordable Care Act going into place, and we need to streamline the process… [Insurers] are doing massive changes to comply with Cover Oregon,” Monnes Anderson said, mentioning the insurance exchange where individuals and small groups will be able to buy health insurance next year in accordance with federal law.

She said this was the wrong time to enact new requirements on insurance companies above what they are already doing for the exchange. She was also more optimistic that SB 413 as passed would provide consumers with clearer notice about existing information regarding rate reviews on the Oregon health rates website.

O’Brien said the website provided terrific information about rate hikes pending or approved by the Insurance Division, but he doubted more than a few hundred consumers signed up to receive e-notification updates. DCBS spokeswoman Cheryl Martines said she did not have exact figures immediately available, but at least 4,000 individuals had signed up for the updates.

O'Brien said many of those could be insurance employees keeping an eye on competitors, as well as independent brokers.

Small businesswoman Michelle Curry of Beaverton testified at the public hearing in early February that she would not offer insurance to employees because she was worried about sudden rate hikes with so little notice.

“I’m a little bit apprehensive to begin offering a benefit when we have no visibility on the potential increases and no way to really impact them,” Curry told the committee.

In 2008, Regence BlueCross BlueShield hiked individual plans by 26 percent in a single year and annual rate hikes have continued to be two to three times the rate of inflation.

Last year, insurers submitted rate increases from 0 to 15.7 percent in the individual insurance market. All of them except LifeWise Health Plan of Oregon had increases above 7 percent on at least some of their individual plans.

Providence Health Plan asked for the highest increase, while Regence asked for a 9.6 percent hike and was allowed an 8.9 percent hike. All but two plans had their rates scaled back by the Insurance Division, some as much as one-half of the proposed increase.

Insurance Commissioner Lou Savage told the committee that unless consumers already knew to sign up for the updates through the Oregon health rates website, the first time most policyholders would ever see notice of rate hikes would be when they receive their renewal forms.

In 2011, the more robust bill requiring rate hike notices to consumers passed the Senate 25-5, with the support of Monnes Anderson, but it died in the House Health Committee, which was evenly split between Democrats and Republicans.

This time around, Regence lobbyist John A. Powell was able to prevent a serious consideration of that legislation from ever moving forward by arguing that sending rate review notices to customers would be unduly burdensome and take weeks to complete, not three days, as the bill required.

“That’s not something that most insurance companies, at least ours could meet. Three days is not practical,” Powell said.

Powell said there were many precautions an insurer must take so not to violate federal privacy laws and ensure that the notice went to the right customers.

But Rick Skayhan, a Portland insurance broker, said Powell’s claim was dubious. Earlier, when he worked as a marketing officer for Health Net Health Plan, Skayhan said he routinely had to send out information to a discrete number of customers with very specific health plans and was able to do so in 24 hours.

Such information is electronically data based and available through insurance codes that would provide adequate privacy protection, said Skayhan, adding that insurers have the ability to run a report limited to only the affected plans with a few keystrokes and send them to people either by email or by using their home address.

“This is not beyond their capacity,” he said.  

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Comments

I can't understand why Sen. Monnes Anderson would oppose this. Insurance companies are largely financial institutions. We require significant amounts of disclosure and notices from financial institutions when they plan to change the terms of our agreements. Typically we want that information IN TIME to make informed decisions. For insurance companies to be exempted from these requirements is ludicrous at best. The insurance companies clearly have the capacity to provide this information to their insured members. They send out regular notices, annual insurance cards, wellness brochures, etc. to insureds regularly. And, the fact that they have 3 days after they file a rate hike is plenty of time. It's not like they just wake up on Monday morning and say, "Hey, let's file a rate increase request! Sounds like fun!" These rate increase requests are very complicated and take significant time to prepare. To make insured notification part of that process does not sound like a difficult step to me. They clearly have to identify all of the insured parties involved prior to making the rate request otherwise they would not have been able to gather the loss ratio data necessary to file the rate request. Either Monnes Anderson is ignorant on the issue or she's in bed with the insurance industry. Someone needs to shake her and wake her up.

This is not just happening to Surgery Centers and Physicians, most all Blue Cross plans are paying the patient for services provided by non-contracted providers. Laboratories are sufffering the most -- they cannot refuse service. The samples (blood, urine, ect) is processed before the insurance information has been entered and billed. Labs cannot discriminate or hold samples, they have to process. And in most cases the patient was referred to the lab by a Blue Cross provider. I work in the laboratory industry and know of many that have lost millions because the payment went to the patient and the patient spent the money. In most cases, the Blues never notifies the lab that payment has been made to patient so there is a time lapse between the patient receiving a check and the lab billing. I In cases of drug screening laboratories (for addiction programs), the Blues are literally putting money in the hands of addicts. Addicts are getting the checks then going out and buying more drugs. What happens if a patient overdosed on the drugs they bought, using the money that the Blues sent them? Would they be responsible for the death of that patient? They would never claim to be, but they would be responsible for the catastrophic costs of treating and overdose whether or not the patient lives. Why Labs have if harder... this policy was put into place not to encourage out of network labs to contract with the Blues, but to enforce their non-compete exclusive agreements with LabCorp and Quest (both of which often can not offer the same services as small specilized labs). The Blues refuse to open their networks to small labs. The only reason this is not ridiculously illegal, is because of the billions of dollars AL the blues plans contribute (pay-off) to different campaigns and govt programs.