Oregon Looks At Beefing Up Health Insurance Premium Reviews

Oregon health officials are considering whether to use the state’s authority to approve or reject health insurance premiums as a tool to drive down health care costs.

The idea is one of several suggestions for improving the health care system that Gov. John Kitzhaber has asked the Oregon Health Policy Board to consider before state lawmakers return to Salem in February.

Kitzhaber wants the board to find ways to expand Oregon’s health care reform efforts, which so far have focused primarily on Medicaid patients, so that they cover everyone else.

Oregon already has some of the nation’s most aggressive oversight of health insurance premiums for plans sold to individuals and small businesses. Insurance companies seeking to raise their premiums must publicly justify the increase, and the Oregon Insurance Division gets the final say. The state-approved premiums are often lower than the insurer’s opening proposal.

A report by the OSPIRG Foundation, which contracts with the state to represent the interests of consumers in the rate-review process, said consumers and small businesses have collectively saved more than $80 million on premiums since 2010.

But the state could do a lot more, Jesse O’Brien, OSPIRG’s health care advocate, told the Health Policy Board at a meeting in Portland on Tuesday. Regulators considering insurance premiums should require that insurers meet certain benchmarks associated with lowering health care costs, he said.

“We need to set an expectation across the board that insurance companies are going to be doing what they can to keep costs down,” O’Brien said after the meeting. “And that’s just not happening right now.”

Health insurers say premiums are only one tiny piece of a complex puzzle of variables that influence health care affordability, said Leanne Gassaway, vice president for state affairs America’s Health Insurance Plans, an industry group, told board members.

Insurance rate review is based on data about past experience and future expectations for revenue and health care claims. But the federal health care overhaul is upending the health insurance market, making it much more difficult for actuaries to project risk, she said.

Health care costs now account for nearly a fifth of the total U.S. economy. They’ve historically grown much faster than inflation, wages and the economy as a whole.

At Kitzhaber’s urging, state lawmakers voted in 2012 to create coordinated care organizations to manage the medical, mental and dental health care for Medicaid patients. Rather than counting on state funding to pay for all health care costs, CCOs will have to live within a budget that grows at a fixed rate.

Health officials hope the CCOs will find innovative ways of caring for patients at a lower cost without skimping on the quality of care.