Rejection Rates Near One in Four

Nearly 6,000 Oregonians who tried to buy individual health insurance were refused in first three months of this year

June 5, 2009 -- At a time when more Oregonians try to find health insurance in the individual market, insurers stepped up the number of people they refused to cover.

Oregon insurers rejected 5,919 individuals for health reasons except pregnancy out of 24,443 total applications from January through March of this year, according to the latest enrollment figures released by the Oregon Insurance Division

Put another way, 24.2 percent of individual applicants were rejected, inching ever closer to one-in-four. Last quarter, insurers rejected 22.7 percent. A year ago, they turned down 23.8 percent.
 
Anyone denied insurance on the individual market can join the Oregon Medical Insurance Pool, also called the high-risk pool, but prices are higher and people often criticize the benefits.
 
“What do we get for our $906? Not much,” wrote Dr. Leigh Dolin, past president of the Oregon Medical Association, in a commentary at TheLundReport.org. “If I had real insurance, I would have seen my doctor a week ago. But wary of running up a several hundred dollar bill, I treated myself at home”
 
LifeWise Health Plans recorded the highest rejection rate compared to other health plans that accept a sizable number of individuals. It rejected 39.9 percent out of 2,946 applicants. Kaiser rejected 32.5 percent out of 1,527 applicants. ODS Health Plan turned down 24.9 percent out of 4,290 applicants, while Regence rejected 21.5 percent out of 8,016 applicants.
 
Overall, health insurance enrollment numbers in Oregon are down in all categories compared to last year, including individuals. There were 198,610 Oregonians insured through an individual plan in the first quarter of 2009, down slightly from 201,172 in the previous quarter and 212,257 a year ago.
 
These increased rejection rates come at a time when health insurance companies have promised reforms on the federal stage while lobbying against key planks in President Obama’s proposal. One of those planks would require insurers to cover everybody, known as guaranteed issue, regardless of pre-existing conditions.
 
The Oregon legislature made no effort this session to regulate underwriting policies that insurers use to deny individuals. Insurance companies can reject as many individuals as they want, but the state assesses companies – roughly $90 million last year – to pay for the shortfall in costs in the high-risk pool. Lawmakers chose to continue relying on the OMIP program and put off for another two years a comprehensive plan toward universal coverage.
 
“(The high risk pool) is hailed by the insurance companies and the legislature as a wonderful solution for those who are denied individual coverage,” Dolin wrote in April. “And it has succeeded in diverting criticism from the insurance companies for their outrageous underwriting policies.”
 
For related stories on individual rejection rates click here.
 
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