SALEM, Oregon - Oregonians can now see proposed rates for 2018 individual and small employer health insurance plans.
Health insurance companies submitted rate requests to the Department of Consumer and Business Services, Division of Financial Regulation on May 15. The division must review and approve any rates before they can be charged to policyholders.
The proposed rates are for health insurance 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.
"This marks the beginning of our open and transparent health insurance rate review process," said Insurance Commissioner Laura Cali Robison. "Oregonians will be able to follow along and provide comments as we analyze the requested rates to ensure they adequately cover health care costs without being too high or too low."
In the individual market, eight companies submitted average rate change requests ranging from a 6.9 percent to a 21.8 percent increase. In the small group market, 10 companies submitted average rate requests ranging from a 2 percent to an 8.5 percent increase. See the chart at http://dfr.oregon.gov/news/documents/2018-proposed-health-ins-rates.pdf for the full list of rate requests.
Rates are required to reflect the average cost of providing health care to a member in Oregon's health insurance market. The division has determined that the average cost of paying claims in the individual health insurance market in 2016 was $384 per member per month; in 2015, the average cost of paying claims was $385 per member per month. Health insurance companies are required to justify any differences to this average in their rate filings.
This year's rate requests follow two years of significant rate increases as insurers have adjusted to changes in the individual market. Rates increased an average of 23 percent in 2016 and 27 percent in 2017. Medical claims for Oregonians have been higher than expected, and federal programs aimed at limiting risk for insurers have ended. Many health insurers have also chosen to shrink their presence in some areas of the state.
Although there have been signs that the market is stabilizing, there is significant uncertainty about the future as repeal or changes to the Affordable Care Act are considered by Congress. Other examples of uncertainty include whether the individual mandate will be enforced and whether cost-sharing subsidies will continue to be paid to insurers. Changes to either of these programs would create significant challenges for Oregon's health insurance market.
Insurance companies are required to file rates assuming that cost-sharing subsidies will be paid and that the Affordable Care Act will continue to be in place in its current form in 2018. In the event of changes to these programs or the law, the division will work with companies to make adjustments as needed.
"We know there are still many unknowns facing insurers and consumers as we look ahead to 2018," Cali Robison said. "Now that the filings are in, we will begin our vigorous review to ensure the proposed rate changes, including the potential impact of various sources of uncertainty, are actuarially sound and justified."
The rate filings also provide a glimpse into what choices will be available to Oregonians in 2018.
Based on the filings, most counties in Oregon will have multiple companies to choose from on and off the marketplace. The exceptions are Lane, Lincoln, and Tillamook counties -- in those counties only two carriers filed plans (just one, Providence, with plans on the marketplace). DCBS will work with insurers during the rate review process to try to provide more choice in these areas.
"We continue to be concerned about the level of choice for Oregonians across the state," said Patrick Allen, DCBS director. "In the coming weeks, we will be exploring our options to ensure all Oregonians have access to plans that fit their needs."
Starting Monday, May 22, Oregonians will be able to search rate filings and submit comments at oregonhealthrates.org. Once scheduled, hearing information will be posted to this website.
Oregonians are encouraged to comment on rate change requests during the public comment period, which is open Monday, May 22, through Tuesday, July 11. The public can submit comments online and during public rate hearings.
Preliminary decisions will be announced Thursday, June 29, and final decisions will be released Thursday, July 20.
The Division of Financial Regulation is part of the Department of Consumer and Business Services, Oregon's largest business regulatory and consumer protection agency. Visit dcbs.oregon.gov and dfr.oregon.gov.