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Oregon's largest health insurer has been granted another double-digit rate increase after raising its rates 26 percent a year ago.
Regence BlueCross BlueShield of Oregon won approval from the state to raise its rates 14.7 percent on July 1 for individual and small group insurance plans affecting about 79,000 Oregonians.
Consumer health advocates say the soaring rate increases are unsustainable and underscore the urgency for health care reform.
"This will throw more people into the ranks of the uninsured," now at about 600,000 in Oregon, said Steve Dixon, advocacy director for Oregonians for Health Security. "That leads to more hospital charity costs, which leads to higher insurance costs, which leads to more uninsured. It is a cycle we need to get out of, and we need to get out before it is a total collapse."
Regence asked for a 19 percent increase, but the Department of Consumer and Business Services concluded the company's projections for claims costs were too high. It was also asking to raise more money for its surplus reserve.
"We didn't think that was appropriate given this small group of policyholders experienced a 26 percent increase last year," said Teresa Miller, acting administrator of the state's insurance division.
Regence reported the company lost money last year despite the 26 percent increase. It has been losing money on individual plans since it lowered rates 16 percent in 2006. In a statement Friday, the company said it will continue to lose money with the new rate increase, primarily because of escalating health care costs.
Costs are rising, the company said, because of "the introduction of new and advanced medical technologies, costs for prescription medications, benefits mandated by the Legislature, an aging population and increase in chronic diseases."
Most other health insurance companies have not yet filed their rate increase requests, said Miller, but last year most of them received double-digit increases.
Rates increases exceeded four times the rate of inflation last year for more than 400,000 Oregonians with individual, small group and portable insurance plans, according to a report released this week by the OSPIRG Foundation, an affiliate of the Oregon State Public Interest Research Group.
The overall average rate increase was 14.2 percent. That included a 17.7 percent increase for individual plans and 11.2 percent jump for small businesses.
Individual rates climbed, for example, 16.9 percent for PacificSource Health Plans, 14.5 percent for Providence Health Plan, and 7 percent for the Kaiser Foundation Health Plan of the Northwest.
The Oregon Insurance Division reports that the average monthly cost of health insurance per person in Oregon in 2007 was $166 for individual plans, $262 for small group premiums and $283 for large group.
The state regulates health insurance only for the individual, small group and portable markets that collectively cover 513,000 Oregonians. Another million get their insurance from large group plans for employers with 51 or more workers. The rest of the state's insured are covered by Medicare or Medicaid.
OSPIRG recommends the state insurance division more rigorously review rate requests and regulate insurance company administrative costs, which also have climbed at four times the rate of inflation. A bill pending in the Legislature would give the division power to review any increase in administrative costs that exceed inflation.
In this economy, said OSPIRG advocate Laura Etherton, families and businesses cannot keep up with double-digit insurance rate increases.
Edda Sigurdar, who runs her own hair salon in Beaverton, said she is now paying $683 a month for health insurance at a time when it is becoming increasingly difficult to get an appointment with a doctor.
"It goes up every year," she said. "I don't know where people are supposed to be coming up with this."
Bill Graves: 503-221-8549; firstname.lastname@example.org
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