OR: Transparency Drives Down Exchange Premiums

Oregon Health Insurance Rate Review

Health insurance exchanges were created to make it easier and more affordable to buy health insurance. That may actually happen.

While many – Congress, insurers, brokers, actuaries, consultants – are worried about the ACA driving up premiums in and out of the exchanges, the Oregon exchange marketplace is seeing market competition start to work.

Proposed premiums for 2014 were published at the end of last week and according to the Oregonian, two insurers – Providence Health Plan and Family Care Health Plans – are lowering their rates based on the market.

Providence Health Plan on Wednesday asked to lower its requested rates by 15 percent. Gary Walker, a Providence spokesman, says the “primary driver” was a realization that the plan’s cost projections were incorrect. But he conceded a desire to be competitive was part of it.

A Family Care Health Plans official on Thursday said the insurer will ask the state for even greater decrease in requested rates. CEO Jeff Heatherington says the company realized its analysts were too pessimistic after seeing online that its proposed premiums were the highest.

The transparency in pricing is giving insurers hungry for business an opportunity to respond to the market with lower prices.

In the past, plan benefits and their corresponding rates have varied wildly. Standardization under the ACA makes it easier to compare apples to apples.

So the exchange market might actually be working as planned – at least a little bit, and maybe only in Oregon – and that’s a start.