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Health Insurance Rates Soar in Oregon
By: John R. Graham
11.20.2009
Oregon’s insurance regulator has approved premium hikes ranging from 9% to 23% in the individual and small-group markets. The media, of course, blame bonuses paid to plans’ senior executives for the hikes.
That’s unlikely: Top execs’ total compensation ranged from $248,000 to $765,000 last year. These are utterly trivial “causes” of health-insurance premiums.
The Oregon Insurance Division (which approves all rate hikes), notes that plans’ surpluses have consistently been about 1% of revenues. Obviously, medical spending is driving premiums, not the other way around. Not discussed is the role of mandatory benefits, which the Oregon legislature has been laying on to health plans: hearing aids, and oral anti-cancer drugs (which was imposed without the legally required cost analysis). Are these worth what they cost? We’ll never know, because the legislature has decided that people will not be able to negotiate benefits with health plans.
Nor does the discussion include the effect of the federal “stimulus” plan, which includes a huge subsidy for COBRA continuation coverage that I predicted would drive up small-group premiums. I have little doubt that this is also a factor.
This blog post originally appeared on State House Call.
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