Jesse Ellis O'Brien
OSPIRG Foundation
Oregon health insurance companies have proposed their premium rates for next year, and according to new OSPIRG Foundation analysis released today, many have not adequately justified their prices.
Close scrutiny of rate hike proposals is important to make sure consumers are not paying for unnecessary costs. For the second year in a row, an insurer—PacificSource in this year’s instance—has admitted that their initial proposal contained errors that would have overcharged consumers. Meanwhile, this year’s rate proposals are all over the map. Providence, for example, is proposing a 16.3% decrease in rates for comparable coverage.
“With some insurers proposing double-digit rate hikes while others are proposing big cuts for identical coverage, it is more critical than ever to scrutinize the basis for these rates,” said Jesse O’Brien, OSPIRG Foundation Health Care Advocate.
“The more we dig into these proposals,” said O’Brien, “the more we’re concerned that Oregon’s insurers aren’t doing all they can to cut waste. And 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.”
OSPIRG Foundation conducted an in-depth analysis of rate proposals from four of Oregon’s top insurers: Moda, PacificSource, United and Health Net.
Key findings of OSPIRG Foundation’s analysis:
The Insurance Division of the Oregon Department of Consumer and Business Services (DCBS) is expected to make its decision on the pending rate requests in August. All rate filing documentation is available on the Insurance Division’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. The Oregon Insurance Division evaluates these justifications, and must take public input into consideration. In 2011, the Insurance Division began to hold public hearings on significant rate increases.
Since these changes have taken effect, the Oregon Insurance Division has significantly stepped up their scrutiny of health insurers’ rate hike requests. Since 2010, it made cuts to a majority of requests, cutting over $155 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