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As any small business or individual who pays for health insurance can tell you, it hasn't been easy. Far from it, what with 20 percent rate hikes and a terrible economy.
But thanks to new rules to crack down on excessive health insurance rate hikes – and the greater scrutiny that has followed – consumers have reason for cautious optimism.
OSPIRG Foundation has had the privilege of being a part of this greater scrutiny, due to a grant of federal funds from the Department of Consumer and Business Services (DCBS) for a project to analyze proposals by health insurers to raise rates.
Of course, we'll never have the resources that the insurers do. But through this project, our policy analysts and certified health actuary have been able to dig deeper into insurers' rate hike requests than ever before.
After our first year on the project, here's why we think things might be looking up:
More scrutiny of rate hikes is saving consumers real money.
Since 2010, insurers must meet higher standards before raising rates, and disclose more information to the public justifying their proposed increases.
Since these higher standards took effect, the Oregon Insurance Division has stepped up their examination of rate hike proposals, knocking back a majority of insurers' proposals, and putting over $37 million back in consumers' and business' pockets.
On transparency, the door has opened further than ever before.
Last fall, in response to recommendations from OSPIRG Foundation and others, the Insurance Division strengthened the process even more.
Insurers are now expressly prohibited from including a hidden profit margin in their medical claims figures – a practice OSPIRG Foundation discovered in its analysis of Regence BlueCross BlueShield's 22% rate hike proposal last spring. You can now read the conversation between state insurance officials and insurance companies about pending rate hikes, practically in real time. And public hearings on rate increases are now a matter of course. Oregonians can learn more at www.oregonhealthrates.org.
There's momentum to tackle the big driver behind soaring insurance rates: Rising medical costs.
We all know it's time to get serious about reducing costs, not by cutting care and raising deductibles, but by cutting waste and focusing on prevention.
Some insurers are stepping up. For example, some are working with teams of providers to improve care for patients with chronic diseases like diabetes and asthma so they can stay out of the hospital. Now, officials at the Insurance Division are looking into the role they might play to encourage these types of improvements, so more Oregonians see lower costs and better quality.
To be clear, we've got a long way to go. Rates are still too high. The process isn't perfect. Small businesses and consumers still get the short end of an ever-shorter stick.
But thanks to greater scrutiny of health insurers, Oregonians are starting to see tangible results. This is good news – and should prompt all of us to double our efforts to rein in health care costs.
Laura Etherton is the health care advocate at OSPIRG Foundation, a non-profit, non-partisan consumer research and policy group. OSPIRG Foundation's Health Insurance Rate Watch project is made possible in part through Grant Number IPRPR0057A from Department of Health and Human Services Office of Consumer Information and Insurance Oversight. The project's advisory committee includes consumer and small business representatives from Consumers Union, Hawthorne Auto Clinic, Oregon Health Action Campaign, and AARP-Oregon.
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