Surprisingly low premium rates submitted for Oregon exchange

Insurers that want to sell health plans through Oregon's health insurance exchange have surprised industry experts with lower-than-expected premium rates.

Health Net, Kaiser Foundation Health Plan, LifeWise Health Plan and Regence Blue Cross Blue Shield and other insurance companies all submitted their proposed health plans they intend to sell on the state-run marketplace, called Cover Oregon.

But despite warnings from industry officials and insurance brokers that premium prices would grow by more than 30 percent in Oregon, the rates that the 16 insurers proposed are actually "much more reasonable than some people had been predicting," Gary Claxton, a vice president of the Kaiser Family Foundation, told Reuters.

Even more shocking, perhaps, is that insurers' initial filings have led to a new concern that the rates are actually too low. If, for example, low rates drive insurers from the state market, there could be less competition among insurers and fewer options for consumers, according to The Oregonian.

Roger Feldman, a University of Minnesota healthcare economist, believes some insurers have filed unreasonably low rates. "They're underpricing," he told The Oregonian. And Terry Coplin, CEO of Trillium Community Health Plan, said "the variation was so astonishingly broad. They all really should be pretty close."

The surprisingly low premiums have compelled some insurers to revise their rates. Providence Health Plan proposed 15 percent lower premiums, and Kaiser Foundation Health Plan decreased their rates by 10 percent.

There's a downside though to allowing insurers to revise their premium rates. "There's absolutely no reason why a plan wouldn't send in a high bid testing the water--and then later on, if they can cut the bid, go ahead and do that," Feldman added. "Then the state is in a pickle."

To learn more:
- read the Reuters article
- see The Oregonian article

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