Oregon weighs enrollment caps, paying for claims as double-digit insurance hikes set for 2027

Oregon Democrats responded to the increases by saying they would work to reduce health care costs for families.

Oregon insurance regulators have approved premium hikes that could cost individuals and small businesses that buy health insurance through the state marketplace dozens of more dollars per month and are weighing policy changes that would limit availability.

State officials with the Division of Financial Regulation in a news release this week framed the nearly 22% increase for individuals and 15.5% for small businesses as a win for preserving statewide access to coverage.

The average plan will cost a 40-year old in Portland seeking a middle-tier insurance policy anywhere from $599 to $734, up from an average $567 for similar plans in the current year. For small group plans, the cost per person for such an individual ranges from $509 to $754, according to state estimates.

Insurance regulators said they made the change after considering new data and updated rate requests from insurance companies to make sure the rates "were actuarially sound and justified based on additional market changes." While they have pointed out that federal cuts have played a significant role in the increases, state regulators also cited other market pressures.

"The finalization of rate orders comes as carriers gained more experience in the market and re-evaluated their market presence," the news release reads. "Continued marketplace uncertainty with the loss of the enhanced federal Affordable Care Act subsidies, heightened medical costs, tariff pressures on durable medical equipment and pharmaceuticals all caused greater cost pressures that were reflected in the rates."

The increased rates prompted three Oregon Democratic lawmakers to issue a press release vowing to work to reduce Oregonians' costs while pointing to federal cuts to health care.

"I'm honestly worried about what this means for Oregon and our ability to provide affordable healthcare," Rep. Rob Nosse, a Portland Democrat who chairs the House Committee on Health Care, said in a statement. "We have tools that can help keep costs down, and we need to use them. At the same time, we need to keep fighting for federal policies that make health care more affordable. We can't keep fighting with one arm tied behind our back."

State regulators pursue reinsurance, potential caps

Financial regulators said they would budget an additional $15 million toward the Oregon Reinsurance Program, which allows the state to help insurers pay for expensive medical claims, to "offset anticipated higher than usual claims costs." The agency will also explore enrollment caps for certain plans to "balance consumer choice with marketwide financial stability."

It's unclear how such caps would operate or what plans they would target. While some states have limited enrollment for state-funded programs, such as health insurance for low-income individuals without legal immigration status, the federal Affordable Care Act ensures access to the marketplace for most Americans during enrollment periods.

Jason Horton, a division spokesperson, told the Capital Chronicle that the agency has not made any final decisions regarding caps, which would be developed in consultation with insurance companies and justified through market data and analytics.

"We don't know when or if that will happen," he wrote in an email.

Agency anticipates little impact from federal tax and spending law

Expiring tax credits to offset premium costs have been central to the rate increases. Low-income individuals have had access to tax credits since the Affordable Care Act passed, and Congress expanded income caps in 2021 to address the fallout of the COVID-19 pandemic. That meant most of the nearly 120,000 Oregonians who purchase individual coverage through the marketplace have had help with more affordable insurance.

But Congress opted against extending the COVID-era enhanced tax credits last year. Now, people who make more than 400% of the federal poverty level, or $63,840 for an individual's annual income and $132,000 for a household of four people, no longer qualify for these subsidies. They continue to remain in place for individuals who make anywhere from 100% to 400% of the federal poverty level.

Another provision from the GOP's 2025 federal tax and spending law will also bar people who are kicked off of Medicaid due to new rules from qualifying for these subsidies. The law's requirements mandate that people work, volunteer, train or go to school for at least 80 hours a month along with income verification reviews every six months for most individuals. The Oregon Health Authority anticipates implementing these changes next year.

Under the 2025 law, people who lose Medicaid for not meeting work requirements become ineligible for marketplace subsidies.

Democrats and eligibility workers have said the new federal law will result in a less efficient system that will make it harder for people who qualify to access Medicaid. In Oregon, people making up to 138% of the federal poverty level, or $22,024.80 for an individual, qualify for Medicaid.

Horton said the rising premiums approved by the state are not directly related to work requirements from the federal tax and spending law. People who are covered by Medicaid cannot simultaneously qualify for tax credits on the marketplace for subsidized plans.

"Some individuals who lose Medicaid may choose to pick up unsubsidized individual market coverage," Horton said. "However, we expect this to be a small number of individuals."

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This article was originally published by Oregon Capital Chronicle and used with permission. Oregon Capital Chronicle is part of States Newsroom and can be reached at [email protected].