More than 220,000 Oregonians face higher prices for 2016 health coverage

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(Dan Aguayo/The Oregonian)

More than 220,000 Oregonians who buy their own health insurance will face higher premiums next year, and Portlanders could see some of the biggest hikes in the country.

Oregon is the first state to announce 2016 rates for people who aren't covered by their employers or government programs. Overall, the news is not good for consumers. 

Some insurers had asked the state to approve rates similar to last year's lowest. But many insurers lost money from unexpectedly high costs, so officials proposed raising many rates in preliminary decisions two weeks ago. The final decisions issued Wednesday resulted in a slightly better range of options for consumer.

Still, the least expensive "silver" plan premium available to a 40-year-old next year will run $271 per month under the new rates. That's up $49 per month over this year's low rate. Bronze plans offer the least coverage under new federal ratings, and platinum the most.

Those prices are not the last word. About half of Oregonians used the health insurance exchange to buy plans in the individual market, and most of those qualified for federal tax credits averaging almost $200 per month.

The state had issued preliminary decisions on June 18, but after public hearings last week decided to approve slightly lower rates for four insurers. As a result, five insurers will offer a silver plan to 40-year-olds for less than $280 a month. Had the preliminary decisions stood unchanged, only three insurers would have offered silver plan premiums on the lower end of the market.

A June 25 Kaiser Family Foundation study based on the state's earlier proposed decisions found that silver plan premiums in Portland would raise on average 16.2 percent, the biggest increase among 11 cities the group surveyed.

Oregon Insurance Commissioner Laura Cali cautioned that premiums are not the whole story. Provider networks and other aspects of coverage may be more important than just choosing the cheapest price, she said. She also noted that despite the hikes, Oregon premiums will still be competitive with other states. That's because rates in Oregon had been among the best in the country.

But rates are fluctuating from insurer to insurer, with market leader Moda approved for a 25.6 percent average increase. Other increases range from 8.3 percent to 37.8 percent.

"This is really market where every year you really need to shop and you really need to look at what the offerings for the market are," said Patrick Allen, director of the state Department of Consumer and Business Services.

The rate hikes won't affect most Oregonians, the majority of whom are covered by employers, Medicare or Medicaid.

Officials say the rate increases reflect changes to the market due to the federal law commonly known as Obamacare, which kicked in in 2014. More people, including sick people, bought policies in part because insurers were prohibited from denying coverage for preexisting medical conditions. A new tax penalty also encouraged people to buy plans.

Officials say raising rates was necessary to cover insurers' costs and keep well-heeled companies from driving others out of the market-- thus hurting competition and rates in the long run.

Insurers' financial reports for 2014 show medical expenses and other costs far outstripped the amount they collected in premiums, according to the state. Specifically, they spent $830 million on individual plans and collected $703 million in premiums, meaning they tapped reserves for more than $100 million to make up the difference.

Many insurers had proposed far lower rates than were set by the state. Zoom Health, a new company, proposed a silver plan premium for 40-year-olds of $233 per month, which would have been a market low. The state proposed the company increase the premium to $291 per month, but in its final decisions allowed the company a $276 silver rate.

-- Nick Budnick
nbudnick@oregonian.com
503-294-5083
@nickbudnick

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