Regulators to Hold Rare Public Hearing on Regence

The largest commercial health plan in Oregon wants a 22.1 percent average increase
The Lund Report
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 following is taken from an Insurance Division press release:
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.

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I wonder what change will be brought from the public hearing? Regence has a history of high rate increases as they have been in the individual market the longest. The longer someone stays on an individual plan, (3 years is the threshold), the more services they start to use. As they become sicker, the chances of being accepted to another plan and pass underwriting drop. As a result, they have to stay on the Regence plan. Regence's membership has dropped from 85,000 to 60,000 from all these rate increases. The bigger question is of those remain, how many could be accepted to other plans? Has Regence's individual plan become another version of OMIP that is serving members who could not get insurance elsewhere? If that is the case, the worse thing that could happen is if Regence exited the individual market. Actually given that Regence administers OMIP, they would get those members either in OMIP or their individual plan.

UHC increased our insurance 23% last year. We ended up dropping them and went to Lifewise instead. Lifewise wasn't really any less expensive but it was the only way we as a business could protest the inordinate rate increase.

I think part of Regence's membership has more to do with the startup of OEBB which took thousands of members out of Regence plans.

I don't believe so. These are individual members we're talking about. If OEBB took any members away it would be in large group or self insured plans, which we aren't talking about here.

David- You're assuming the individual product line for Regence hasn't historically operated in a loss, which is incorrect. Revenue from the lost OEBB and fully insured PEBB accounts supported less profitable business lines. In fact, the cross-subsidization across product lines has been a grave area of concern inside Regence for many, many years.

I am tired of paying higher premiums, seeing my coverage lowered and my deductible increased with our Regence individual plan. Both my wife and I work at companies too small for group insurance and we are seriously considering taking the whole family off insurance. It's that or starvation!!!!! Utterly unacceptable: See related news

Regence is at it again! I certainly intend to attend the hearing, I want to see who attends form all sides and how and why Regence "must" again increase their rates....follow the $$. It goes to the 16th floor, here in PDX. What was once (over 50 years ago) a novel idea of "health insurance" via collecting premiums to provide preventative and necessary health care, has become a commodity. Health Care benefit dollars primarily do not go directly toward health care, they go for the administration of health care. Everybody knows that, & that is a failed system for spreading dollars among risk. Regence is a failed and practically malfeasor when it comes to risk management. They are interested in protecting their "corporate"/executive risk (look at the entire TRG Corporate structure throughout the four states), not in creating a working, breathing, healthy system for assuring and insuring healthy communities aka real people. I know of a 24 year old Grad. student who applied for an individual plan, she is perfectlyhealthy & has always enjoyed excellent care when/if she required it. She was DENIED an individual plan because she had: allergies (specifically to pollen). I think we can all afford the risk of insuring her, but no, Regence would rather reap a larger benefit by forcing her into the already over-priced OMIP, which they of course has somehow managed to control as administrators. RIDICULOUS!!! Time for Mark Ganz to re-think what it means to BE an "insurance" company executive. Redefine the mission to a comprehensive end for the community or he & others will lose their silk socks in the very near future (they are already wearing thin)!

I am a bit confused, TRG is required to provide their proposed rate increase, your article (& perhaps I am simply misinterpreting it) seems to imply they have not yet made their outline available to the public? Can someone confirm this via a yes or not re the issue? Thank you! lmh

NOTE: The hearing was location was ganged 05/19/2011 to the following: PSU Campus (University Place, 310 SW Lincoln St.) One of the three rooms is Multnomah Falls Conf. Room, the state intends to have signage and people who can direct attendees to the Hearing. Save the date & time!! It is 06/02/20111 (Thursday) 4:30-7:00 p.m.//Lmhh