Regence defends rate hike against angry public

Regence Blue Cross Blue Shield of Oregon execs were grilled by state officials at a contentious public hearing about its request to increase individual rates by 22 percent. Those offering public testimony overwhelmingly blasted the Regence proposal, reports the Portland Business Journal.

Regence argues that as healthcare costs increase and fewer people purchase individual insurance, it has to increase rates. During the last five years, the insurer has lost $100 million, according to Oregon Public Broadcasting. "We're not trying to get a penny of that back. We recognize that that is our loss. But what we need to do is set a rate that we can pay those claims moving forward as they come in," said Regence spokesman Scott Burton.

President Jared Short said the insurer's service costs also have risen drastically. Emergency room costs-per-case are up 54 percent, but visits are down 14 percent. Maternity costs-per-case are up 50 percent and outpatient surgery costs-per-case are up 59 percent, the Journal notes. He added that the cost of care for individuals has risen from $150 million five years ago to $184 million last year.

"This [rate] increase is necessary for us to meet our promise to pay our members' medical bills," Short said. He explained that the 22 percent increase would cost customers on average $37 more per month, of which $1 would go to administration, $11 to new benefit costs and $25 to the rising costs of care, according to the Oregonian. In addition to the rate hike, Regence has attempted to stem rising costs by cutting 1,000 employees in the last year, freezing employee wages and reducing benefits.

But Laura Etherton, a health policy advocate for the Oregon State Public Interest Research Group, said Regence has a reserve of more than $500 million. The company also has had double-digit increases every year since 2007, while its enrollment has dropped by 43,000 customers. Another big rate hike would cause more people to leave, reducing the risk pool and undermining the stability of the company's individual market, Etherton said. Therefore, she urged the insurance division to reject the rate request. "It is not justified, and it will only make matters worse," she said.

The Oregon Insurance Division will review the testimony and complete an analysis of the rate request before making a decision on it by the end of the month.

To learn more:
- read the Oregonian article
- see the Portland Business Journal story
- check out the Oregon Public Broadcasting piece