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Individual members of Regence BlueCross BlueShield could see an average 9.6-percent rate increase statewide, requested by the insurer months after announcing network changes to cut costs.
In the Portland-area, the rate increases could hit 20,000 customers in the individual health market, depending on their previous deductible as well as their choice of five separate hospital-affiliated provider networks:
Providence Health: 15.3 percent
Oregon Health & Science University: 12.2 percent
Legacy Health: 11.2 percent
Tuality Health: 6.7 percent
Adventist Health: 2.6 percent
The proposed rate hikes would affect only those who buy insurance on their own -- not those on Medicare or who get coverage from their employer. Members who chose high-deductible plans in the past will see the biggest increases.
Don Antonucci, Regence's Oregon president, said the proposed rate hike is based on increased costs for procedures as well as utilization. "Costs continue to rise in this segment for us," he said. He said Regence falls "in the middle of the pack" among competitors, with an average individual premium of $213 per month.
The network changes and tiered rates only affect people living in Clackamas, Multnomah, Washington and Yamhill counties, who have to choose a provider network starting in December. All the increases require a public hearing and state approval.
Not only that, but because Regence is discontinuing its $1,000-deductible plans, about 60 percent of its customers could actually see rate decreases -- because they were shifted to plans that are not as rich in benefits, Antonucci said. In other words, the rate increases will fall on those already in the cheaper plans.
Regardless, the proposed rate increase is the latest in a series of significant changes for Regence's individual-market customers.
In April, Regence announced it would cut back its previously wide-ranging provider network in the Portland area for individual members, in a move the firm said would cut costs at least 5 percent.
Under the initial plan, Portland-area members would choose between the Adventist and Tuality provider networks, with 1,100 physicians between them. Members seeking care from a hospital or provider that's out of network would pay a hefty out-of-network penalty.
The proposal triggered widespread criticism as well as state Department of Insurance inquiries concerning the network adequacy of Regence's plans.
Last month, Regence announced that members could select among five networks, including Legacy, Providence and OHSU, with a sliding scale of rates depending on the member's choice.
In June, Antonucci said the cost-cutting would reduce future rate hikes and not lead to a decrease in premiums. He said the tiered rates would increase transparency and give customers more control over their premium.
Under the proposed rate increase, individual members living outside the Portland area don't have to choose between networks, and will see an average 10.2 percent rate increase.
The Oregon Insurance Division will begin its review of the proposal and will likely schedule a public hearing in Salem, as soon as July 30, according to a spokesperson. The Oregon State Public Interest Research Group will conduct its own review, says Jesse O'Brien, an advocate for the group. "We're very concerned about this increase," he said.
The change follows years of declining membership and financial losses in Oregon for Regence, Oregon's largest insurer in the private health insurance market. It also reflects a growing trend among health insurers to curb escalating costs. Regence representatives say the move is necessary to allow it to remain competitive in the Portland area.
For more information on the provider network changes, call Regence at 1-888-675-6570 or check the company's website.
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