Jesse Ellis O'Brien
OSPIRG Foundation
Health Insurance Rate Watch RATE ANALYSIS: June 8, 2016
Contact: Jesse O’Brien, OSPIRG Foundation, 503-231-4181x307 (office), 503-504-8627 (cell)
Proposed health insurance rate hikes up to 32.3% merit close scrutiny, raise stakes for containing rising health care costs
New OSPIRG Foundation analysis of 2017 rates proposed by five Oregon insurers—Kaiser, Moda, PacificSource, Providence and Regence—identifies problems and gaps in the insurers’ filings, and calls for increased scrutiny of health care industry efforts to cut waste and improve quality of care.
Many of Oregon’s biggest health insurers have proposed large double-digit rate hikes for 2017, and according to new OSPIRG Foundation analysis released today, these proposals highlight not only the need for close scrutiny of health insurance rates, but also the urgency of action to contain the rising cost of health care services.
Close scrutiny of rate hike proposals is important to make sure consumers are not paying for unnecessary costs. For next year, Oregon’s major insurers are proposing rates ranging from no increase for Health Net to a 32.3% increase from Moda for individuals and families purchasing coverage on their own.
“With Oregon consumers facing a second year in a row of huge double-digit rate hikes, it is more critical than ever to scrutinize the basis for these rates,” said Jesse O’Brien, OSPIRG Foundation Policy Director. “We acknowledge that many Oregon insurers lost money in 2015, and it is not unreasonable for them to seek to avoid large financial losses going forward, but the more we dig into the insurers’ justifications, the more concerned we are that the proposed rates may overcharge consumers.”
“We are also deeply concerned that while insurance companies are proposing double digit rate increases, Oregon’s large hospitals and health systems are recording record surpluses,” said O’Brien. “With study after study showing that one-third of health care spending is waste, we can’t afford anything but a full-court press for more effective use of our health care dollars, and we’re calling on state leaders in Salem to take action to hold the health care industry accountable for keeping their prices reasonable and sustainable.”
OSPIRG Foundation conducted an in-depth analysis of rate proposals from five of Oregon’s top insurers: Kaiser, Moda, PacificSource, Providence and Regence.
Key findings of OSPIRG Foundation’s analysis:
The Oregon Department of Consumer and Business Services (DCBS) is expected to make its decision on the pending rate requests by July 1. All rate filing documentation is available on DCBS’s rate review website, www.oregonhealthrates.org
Background on Oregon’s health insurance rate review program
In 2010, new rules went into effect strengthening the standards that health insurance companies must meet before raising premiums. Insurers must justify rate hikes in writing, showing that they are not excessive and explaining how the insurer is working to reduce costs. All rate filings are public information, available online, and open to public comment. DCBS evaluates these justifications, and must take public input into consideration. In 2011, DCBS began to hold public hearings on significant rate increases. See here for a schedule of public hearings for the 2017 rate proposals.
Since these changes have taken effect, DCBS has significantly stepped up their scrutiny of health insurers’ rate hike requests. Since 2010, it made cuts to a majority of requests, cutting over $179 million in waste and unjustified costs from consumers’ and small businesses’ premiums.
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OSPIRG Foundation is a non-profit, non-partisan statewide consumer organization. Please visit us at www.ospirgfoundation.org