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$80M In Health Insurance Waste Cut Since 2010 In Ore.

Targeted News Service

PORTLAND, Ore., April 18 -- The Oregon State Public Interest Research Group Foundation issued the following news release:

Since 2010, close scrutiny of health insurance rate hikes has cut over $80 million in waste and unjustified costs from health insurance premiums in Oregon, according to an OSPIRG Foundation report released today. The report also identifies changes to Oregon's rate review program that would effectively tackle the biggest driver of costs: waste in the health care delivery system.

"Oregon's rate review program has been a huge win for consumers, but we know that $80 million is just the tip of the iceberg," said Jesse O'Brien, OSPIRG Foundation health care advocate. "Studies consistently show that a third or more of all health care spending is wasted on things that do not improve health. Oregon consumers and small businesses are still being asked to foot the bill for waste, so more action is necessary."

The Oregon Insurance Division's (OID) health insurance rate review program is widely regarded as one of the strongest of its kind in the country. When health insurers in Oregon wish to increase their rates on small businesses or people purchasing coverage on their own, they must submit a written justification. The OID then evaluates whether the proposal is reasonable and goes on to and approve, disapprove or cut back the proposed rate. OSPIRG Foundation's progress report on Oregon's rate review program explores the impact of tough new standards implemented in 2010.

Key findings of OSPIRG Foundation's analysis:

* Stronger rate review has cut over $80 million in unjustified costs from consumer and small business premiums since 2010.

* State officials have cut rate hikes over 17 percent on average. Prior to the 2010 reforms, state regulators trimmed rate increases by an average of only 6 percent.

* Since 2010, rate review decisions have reduced the portion of premium spent on administrative costs by 5.4 percent on average, a reversal of a trend toward higher administrative costs before 2010.

"Heightened scrutiny of rate increases has been associated with real progress toward a more cost-effective health insurance system," said O'Brien. "Oregon's pioneering efforts show that accountability works to bring down costs; now is the time to take some common-sense steps to build on that success."

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Key recommendations of the report

* Strengthen standards for insurer cost containment and quality improvement efforts. By focusing on insurer payment strategies, rate review can help drive systemic reforms to improve safety, increase care coordination, boost prevention, and bring down costs for consumers and small businesses.

* Preserve and strengthen the integrity of the process. Insurers should not be allowed to raise rates without being held accountable to a robust review of all data necessary that evaluate the reasonableness of their stated projections of future cost growth.

* Make rate review more transparent and user-friendly. Consumers and small businesses should be notified of pending rate requests that affect them, and informed of opportunities to comment on proposed increases. Consumers should also be able to determine the impact of a rate request on their own premium without difficulty.

"Health insurance rate review is an important tool to create some accountability for cutting waste in the health care delivery system," said Sabrina Corlette of Georgetown University's Center on Health Insurance Reforms, who helped review the report. "OSPIRG Foundation's report and policy recommendations outline a way forward."

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Copyright: (c) 2013 Targeted News Service
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