Oregon's top health insurance regulator is taking the unusual step of encouraging higher premiums in a competitive individual market, where the lowest-cost plan may also be the most disruptive.
Actuaries at Oregon's Insurance Division have concluded that the state's individual health insurance market needs some stabilization in the form of premium increases, based on a discrepancy between proposals from 13 health plans and utilization trends of the insured population, so far.
In 2014, individual health plans in Oregon brought in $703 million in premiums but spent $830 million on claims, with costs exceeding premiums by more than $600 per person.
"As regulators, our mission is to protect Oregon's insurance consumers," said Insurance Commissioner Laura Cali. "That means consumers are not overcharged for health insurance, but it also means that rates must cover the cost of patients' medical bills when they go to the doctor, hospital, or pharmacy. We have proposed increased rates in order for consumers to continue counting on the coverage they have purchased."
In Oregon's individual market, the Insurance Division has made preliminary rate decisions on 13 health plans from 12 insurers (Regence Blue Cross Blue Shield is selling under two brands). The pending proposals would see premiums increase on average anywhere from 8.3 percent to 38 percent. In metropolitan Portland, the standard silver plan premium would range from $271 to $389.
In Oregon's small group market, the increases would be more modest and include some significant decreases, ranging from a 7 percent reduction to a 15 percent increase. A small group silver standard plan would cost a 40-year-old Portlander anywhere $275 to $356 a month.
In the individual market, the competition seems fairly fierce, with an array of choices and a range of more than $150 between the lowest-cost and highest-cost plans.
One insurer, nonprofit PacificSource Health Plans, proposed a 42 percent increase and could sell the most expensive standard silver plan in the state, priced at $405 per month. Behind PacificSource would be Lifewise Health Plan, a subsidiary of Premera Blue Cross, seeking a 38.5 percent increase for a standard silver plan priced at $318. Many of the other plans are priced not too far above $300 per month, before subsidies.
(Source: Oregon Insurance Division)
The lowest-cost silver standard option, for $233, is being sold by Zoom Health Plan, a relatively new insurance plan from Zoom+, a 9-year-old company founded by two entrepreneurial-physicians promising "twice the health at half the cost with ten times the delight." Zoom provides comprehensive primary and urgent care through 27 neighborhood clinics in Portland, Vancouver, Washington and Seattle, and relies on hospital networks with Oregon Health and Science University, Providence Health & Services and Legacy Health.
Somewhat similar to the model of Group Health Cooperative, Zoom pitches members direct primary care, access to speciality and hospital care, as well as nontraditional health services like Olympian-level circuit training, "food and movement as medicine" classes, parenting coaching and free dental exams and cleaning. This is the company's first time selling individual health plans on the exchange.
After Zoom, the lowest-priced plans would be sold by Health Net of Oregon, Oregon's Health CO-OP and Kaiser Permanente's Foundation Health Plan of the Northwest, the one individual plan that would have premiums decrease.