Oregon officials want better consumer reviews of proposed insurance premiums
November 10, 2010 -- The consumer advocacy group OSPIRG has been awarded a $100,000 grant to provide in-depth analysis to the Oregon Insurance Division about health insurance rate increases.
The grant will allow the group to hire an expert and develop a detailed methodology to analyze proposed rate increases, said its health policy advocate Laura Etherton. Consumers and businesses could then use what OSPIRG learns to analyze their own rate increases.
“We’re really excited about this because it allows us to devote the necessary staffing and actuarial experience to the project that we’ve been wanting to do anyway,” Etherton said. “We’ll be looking to increase our own expertise so we can continue it into the future.”
The one-year grant is part of a $1 million allotment the Department of Consumer and Business Services received following the federal health reform law. An additionally $200 million is available nationally over the next five years to help states improve rate reviews.
OSPIRG has been a leading advocate for increased scrutiny of insurance premiums, having pushed for greater transparency in the documents made public to justify rate increases. Those measures will be put to the test in coming months as a series of double-digit increase requests
are still pending before the Division.
This year, the state opened all insurance rate increase requests to public comment. But very few people have responded.
“We haven’t received as many comments as we had hoped,” said spokeswoman Cheryl Martinis. “Very few people evaluate the rate requests against the technical criteria we use to determine whether an increase is excessive.”
Part of the methodology OSPIRG plans to develop will focus on whether profits, administrative expenses and estimates of growth in medical claims are supported by data, Martinis said.
“We think this will provide an invaluable perspective on key rate requests and also help educate people on the issues surrounding health insurance and healthcare reform,” she added.
OSPIRG intends to take a detailed look at rate filings such as:
- Whether the rate filing includes benefit changes
- The percentages devoted to administration, claims and profit/margin
- The number of people affected by the proposed increase and how that rate is distributed across the population
- Whether the filing is for small group, individual or portability coverage
- The financial position of the insurer including their surplus and reserve history and the geographic reach of their provider network.
- What the insurer is doing to reduce medical cost trend through benefit design, payment reform, and
- Whether their enrollment numbers are stable.
OSPIRG also plans to establish an advisory committee that includes some of the state and country’s top experts and community organizations to help guide this project. They intend to issue a final report to the Insurance Division, including recommendations for further enhancing the rate review process and consumer engagement.
When it comes to rate review, insurers argue that medical claims comprise the majority of any rate increase. According to state regulators who approve most rate increases, that claim largely holds true. It’ll be up to OSPIRG to prove them wrong.
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