Salem — Beginning today, Oregon consumers can see the state’s preliminary decisions for 2017 individual and small employer health insurance rates. The Department of Consumer and Business Services must approve any rates before they can be charged to policyholders.
These preliminary decisions will undergo continued review and discussion through public hearings being held in Salem and streamed online June 22-23. The public comment period also will remain open through Friday, June 24. There will be a dedicated public comment period during each public rate hearing. For a schedule of hearings and to submit comments online, visit www.oregonhealthrates.org.
Health insurance rates are an estimate of future expenses, including medical and prescription drug claims costs and administrative expenses. These estimates are based on historical data and forecasts of future trends.
The department reviews rates to ensure they are reasonable and actuarially sound — meaning they are sufficient to cover costs so that health insurance companies can pay claims, but not excessive. After reviewing 2017 rate proposals, the department made a few adjustments, but concluded most rates were reasonable based on projected expenses for 2017.
In the individual market, the division’s preliminary rate decisions range from an average rate increase of 9.8 percent to an average rate increase of 32 percent, depending on the insurance company. Under the preliminary decisions, Silver Standard Plan premiums for a 40-year-old in Portland would range from $312 to $442 a month.
In the small group market, the division’s preliminary rate decisions range from an average rate decrease of 8.9 percent to an average rate increase of 17 percent. Silver Standard Plan premiums for a 40-year-old in Portland would range from $266 to $362 a month.
Click this link for company-specific information.
“Our preliminary decisions reflect some instances where we believe assumptions were not fully justified or not reasonable,” said Laura Cali, insurance commissioner and administrator of the department’s Division of Financial Regulation. “However, we generally see the need for rates to increase in order for insurers to be able to meet their obligations to policyholders.”
Factors for the rate increases include:
* State and federal “reinsurance” programs, designed to help insurers offset the risk of insuring more people who now have access to coverage, are ending in 2016.
* Medical costs continue to rise, driven by increased utilization and advances in prescription drugs and medical technology.
* Costs have exceeded premiums in recent years, so insurers have less capacity to absorb more losses.
“Health reform has provided access to insurance coverage for more Oregonians, which has been a positive for the health of our state,” said Patrick Allen, DCBS director. “However, factors that have more to do with provider costs, such as prescription drugs and contracts with specialty providers like hospitals and dialysis centers, are increasing important factors that are not dealt with through insurance rate regulation.”
Preliminary decision information for each carrier can be found at www.oregonhealthrates.org.
The proposed rates are for plans that comply with the Affordable Care Act for small businesses and individuals who buy their own coverage rather than getting it through an employer. Final decisions will be released July 1.