Insurer’s rate proposal may be unjustifiable, according to the OSPIRG Foundation
Recently, Oregon’s Regence Blue Cross Blue Shield sought to increase rates for individual health insurance plans. According to the rate increase proposal, some consumers may see their premiums rise by as much as 16% if the proposal is accepted by state regulators. A new analysis released by the OSPIRG Foundation, a consumer advocacy group, suggests that the health insurance company is not able to justify its need for rate increases. The rate proposal from Regence Blue Cross Blue Shield is still under review by Oregon insurance regulators.
Federal law requires insurers to justify rate increases of 10% or more
According to federal law, health insurance companies are required to provide justification if they want to raise premiums by an average of 10% or more. If the justification provided by the insurer does not satisfy state insurance regulators, the company may be required to rework its proposal or face having its proposal denied until it can be submitted again in the future. OSPIRG analysis suggests that the rate proposal coming from Regence Blue Cross Blue Shield is unjustifiable and that the proposal itself is not backed by any relevant data.
Regence Blue Cross Blue Shield accused of providing too little information to justify rate increase
The analysis shows that the medical trends that are highlighted in the rate proposal do not have a solid link to the growing cost of medical care. OSPIRG claims that the insurance company has not provided quantative data concerning the information it has provided on these medical trends, thus cannot use them as a justification to raise rates on coverage. The insurer is also looking to make changes to its medical care provider network, which may cause some confusion amongst policyholders.
Rate increase could affect more than 52,000 consumers
The insurer’s proposal could affect more than 52,000 consumers if it is approved by the state’s insurance regulators. Rates are expected to spike by 16% for some policyholders, while others could see rate hikes of 9.6%. Regence Blue Cross Blue Shield is also looking to raise the deductibles of some of its more expensive plans to $2,500. OSPIRG notes that Regence Blue Shield Blue Cross continues to work to raise premiums but cut coverage to consumers.
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