This is from an email (received a while back; this post is a bit belated) from the Oregon State Public Interest Research Group, which tracks and contends with a range of consumer and other interests in Oregon. One of those is the ballooning increase in medical insurance rates - and here OSPIRG scored a win last month, helping get a proposed massive rate increase significantly scaled back.
The email is worth quoting at some length.
Last December, we submitted comments to the Department of Consumer and Business Services (DCBS) Oregon Insurance Division, questioning the underpinnings of United HealthCare’s proposal to raise policyholders’ rates by 16.8%.
On Thursday, DCBS announced that they approved a lower increase of 10%, which according to their analysis will save consumers $4 million a year.
You can read the rate decision and the DCBS response to OSPIRG’s comments here: http://tinyurl.com/4fvqccx
For more about the original rate hike proposal and OSPIRG’s comments on the OSPIRG website at: http://tinyurl.com/4al4v9l
The reduction was due to two factors. First, United HealthCare provided updated data that suggested that their medical costs were lower than their initial filing had anticipated. Second, we had raised questions about United’s administrative costs, including the insurer’s practice of paying brokers a commission based on a percentage of enrollees’ premiums. Since premiums increase much faster than general inflation or wages, this practice can artificially inflate administrative costs.
DCBS agreed with us that theses costs were too high, and in response, United HealthCare will now pay its brokers a commission based on the number of members they sign up, rather than paying them a flat percentage of enrollees’ premiums. This change will create significant savings for consumers. (more…)