Health Insurance

Oregon dumps cold water on low Obamacare rates

Repealing Obamacare would add $353 billion to deficits: CBO

They wanted their Obamacare prices to be low—but the state said "no."

The state of Oregon reportedly has ordered a number of insurers to raise proposed Obamacare premiums for 2016 after some of those companies asked for rates that were only moderately higher, if not lower than this year. (Tweet this)

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Now, many Obamacare customers there are looking at likely double-digit percentage rate increases after having experienced some of "the lowest premiums in the nation," the Oregonian noted.

A Cover Oregon webpage
Source: Cover Oregon

For example, Oregon's Health CO-OP asked for a 5.3-percent average rate increase for next year, but the state's preliminary decision calls for a 19.9 percent average hike for that insurer's plans. Trillium Community Health Plan requested a 5 percent average increase, but the state wants 12.4 percent hike.

And Kaiser Foundation Health Plan of the Northwest wanted to actually cut rates by an average of 2 percent. But the state said those rates should rise by an average of 8.3 percent.

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Even in cases where the state didn't modify a proposed rate, many customers are in for bad news.

The Oregonian noted that Moda Health Plan, which covers almost half of Oregon's 220,000 people who buy their own private health insurance, asked and received approval for rates that are 25.6 percent higher on average.

The state's move to force rates higher than those proposed is in response to concerns that Oregon's Obamacare prices were too low for what insurers were paying out to cover for customers' health benefits.

In 2014, Oregon insurers collected $703 million in premiums, but paid out $830 million on their plans, the Oregonian noted, citing insurers' financial reports.

"We need to ensure a market that long term is stable, competitive and insurers pricing that is much closer to the cost of delivering health care," Oregon's director of Consumer and Business Services Pat Allen told the newspaper.

The rates for 2016 won't become final until after public hearings later this month.

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While the state is concerned about the finances of insurers, customers could be in for some big surprises, particularly if they do not have their premiums subsidized by federal tax credits.

One example noted by the paper was Zoom Health. That new insurer had proposed charging $233 per month in premium for a 40-year-old customer of its "silver plan," which would have been the lowest-priced plan in that level of plans, the Oregonian reported.

Instead, the state is calling for Zoom Health to charge $291 per month, or 25 percent more.

Silver plans cover 70 percent of the in-network medical costs of their customers, with customers owing the balance in out-of-pocket payments. Silver plans are the second least-expensive type of Obamacare plans and are the most popular.

Read the full Oregonian article here.