Oregon’s process of reviewing proposed health insurance premiums is working exactly as intended and will save consumers $24 million in 2015 premiums, according to OSPIRG Foundation, a consumer watchdog group, .

Since 2010, insurance plans that want to increase their premiums for small businesses or individuals purchasing coverage on their own have had to submit written justification to the Oregon Insurance Division. The Insurance Division then evaluates whether the proposal is reasonable and approves, rejects or adjusts the rates.

Oregon plans had to file their 2015 rate requests by June 2, and the Insurance Division issued its final rates last month. Requests ranged from a 28 percent increase to a 21 percent decrease on individual and family plans; the division approved rates ranging from a 10.6 percent increase to a 21 percent decrease in premiums. Rates approved for small business insurance plans ranged from a 9.9 percent increase to a 20 percent decrease.

“I think consumers have a lot to be happy about here,” said Jesse O’Brien, a health care advocate with OSPIRG Foundation . “There are a number of areas where they took out their red pens and made sure that the insurance companies were really justifying what they were saying.”

Moda Health, the state’s largest insurer, requested a 12.5 percent increase in premiums for individual and family plans in 2015 but was approved for a 10.6 percent rise. Oregon’s Health Co-op had planned to cut its rates by 21 percent in 2015, but the rate review allowed it to cut rates by only 9.9 percent.

“The concern there is that the rates are sustainable. If a rate is too low to actually cover the cost of health care, then either the insurance company goes under or they have to raise rates really steeply next year,” O’Brien said. “As a consumer advocate, I’m reluctant to say the rate is too low, but there is a question about what the insurance company can sustain.”

While several other states require rate reviews, O’Brien said, Oregon has one of the most transparent and strict processes in the nation. Since 2010, it has cut insurance premiums by a combined $179 million.

The OSPIRG report detailed where the Insurance Division found fault with the plans’ rate requests.

Few plans accounted for the expected savings in charity care as more individuals gained insurance in 2014. In the past, those costs would be shifted to patients with private insurance. With 400,000 Oregonians newly insured in 2014, most hospitals are seeing their rates of uncompensated care go down. The Insurance Division cut many insurers’ rates by 2 percent to reflect those changes.

Oregon Health & Sciences University, for example, reported the percentage of patients seeking care who don’t have insurance dropped from 5 percent in 2013 to 1 percent in 2014. St. Charles Health System reported a drop in its uninsured rate from 5.5 percent in 2013 to 3.2 percent in 2014and a $13 million decline in the amount of charity care provided through August. But hospital officials said those savings are being offset by the large increase in patients covered by Medicaid, which pays lower rates than private insurance.

Many of the plans tried to justify higher premiums by projecting large increases in health care costs, even though national studies are projecting a slowdown. Others argued that the inability to deny coverage for pre-existing conditions would raise their costs significantly for 2015, requiring rate hikes. The Insurance Division didn’t agree with either of those assertions and cut the rates requested by those plans.

After initially requesting a 16 percent increase, Bend-based PacificSource Health Plans announced it had discovered an error in its calculations and revised its request to a 10.6 percent premium hike. The division approved a 3.9 percent increase instead, cutting premiums by $14 million from the original request.

The rate decisions affect the 10 percent of Oregonians who don’t get their insurance through a large employer-sponsored group plan or public health programs such as Medicare or the Oregon Health Plan. Premiums will decrease for most plans in 2015 but will increase for Moda Health Plans, the insurer that covers the largest number of enrollees. That means many individuals will have options to lower their premiums from 2014 by changing plans.

In 2013, most Oregonians enrolling through Cover Oregon, the state’s health insurance exchange, chose the least expensive option.

In Central Oregon, for a 40-year old, single, nonsmoker, choosing a standard silver tier plan in 2014 from Moda would have a monthly premium of $221. (Silver tier plans cover an estimated 70 percent of medical costs.) In 2015, that premium will increase to $245.

But that same individual could opt for a comparable plan from LifeWise Health Plan of Oregon, whose monthly premium dropped from $267 in 2014 to $239 next year.

“What we saw this past year is that Oregon consumers are enormously price sensitive when they’re shopping for health insurance, and the overwhelming majority of people went for the plan with the cheapest premium,” said O’Brien, of OSPIRG. “The plan with the cheapest premium is going to change next year, and the plan that had the cheapest plan this year is actually going to be increasing significantly.”

That means individuals who bought insurance on their own last year would be well-advised to shop around again this year, he said. The open enrollment period for coverage in 2015 runs from Nov. 15 to Feb. 15.

Oregonians will most likely have to re-enroll for 2015 anyway as the state transitions from its own Cover Oregon website to the federally run health insurance exchange.

“That’s going to mean that this is kind of a reset for the market,” O’Brien said. “And I think a lot of people are going to change coverage.”

—Reporter: 541-617-7814,

mhawryluk@bendbulletin.com