Checking the Math on Health Insurance Bills
Evan Manvel
We all know health care costs are a major burden for Oregonians, Oregon governments, and Oregon businesses. Having strong oversight of those costs just seems like good sense.
Yet a 2009 Oregonian investigation found: “State regulators have approved every rate increase by Oregon’s largest health insurance companies over the past three years, trimming the requests in only seven of 40 cases.”
While the Insurance Division has made some improvements since then, more can be done. Bill Graves and Jeff Mapes covered the issue in The Oregonian last month
“States that have an active, robust and publicly inclusive rate review process are generally better at getting lower premium increases for policy holders,” said Sabrina Corlette, a research professor at Georgetown University Health Policy Institute, during testimony by telephone ... “We did find good evidence that even the threat of a rate hearing can cause carriers to reduce rate increases.”
State Senator Chip Shields is leading the charge on this issue, and is hearing four bills tomorrow in the Senate Committee on General Government, Consumer and Small Business Protection, a committee he chairs.
The bills:
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SB 653: Allows health insurance policy holders to contest state-approved premium increases.
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SB 716: Requires the Insurance Commissioner to order an independent analysis of rate request if it increases premiums 5% or more and affects 5,000 or more policy holders. This is similar to the approach in Vermont.
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SB 717: Authorizes the Insurance Commissioner to conduct a public hearing regarding the approval of health insurers premium increase request. Makes the Attorney General party to the hearing to advocate for policy holders.
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SB 718: Requires the Insurance Commissioner to post detailed rationale for approval of a rate increase request.
I'm no health policy expert. But it just makes sense that decisions that can cost Oregonians $30 million should be subject to thorough analysis, public review, and explanation. If we're paying the bill, we should be able to check the math.
Watch the hearing live on Wednesday at 1 pm in Hearing Room B.
As background, I highly recommend watching the video of former State Senator Charlie Ringo (above) as he outlines the problems he’s found while working on the issue.
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March 01, 2011 |
Evan Manvel
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4:36 p.m.
Mar 1, '11
4:50 p.m.
Mar 1, '11
The rate review process that Charlie Ringo describes in the video was a sham, a hoax, a disgrace. Better no public review than that kind of a review.
9:02 p.m.
Mar 1, '11
"If we're paying the bill, we should be able to check the math."
I couldn't agree more, but when you look at the math it's clear the major problem ISN'T the insurance companies. Per DCBS the medical loss ratio on files subject to their review run at 85%, with medical cost inflation running at 12%. You could have angels come down and administer your insurance for free and the savings would disappear in 18 months.
The insurance math matters but there is at least a framework for regulating it, even if it's one that can be improved. Health care provider pricing matters a lot, and has virtually no regulation. That's the nut that has to get cracked.