Catholic Sentinel photo by Ed Langlois
The admitting desk at Providence Portland Medical Center.
Ed LangloisProvidence Health Plans is seeking a 15.7-percent rate increase for more than 12,000 patients covered by individual and small employer policies.
Of the Catholic Sentinel
Citing increased cost of care and the need to implement federal health reform mandates, Providence filed the proposal in July with the Oregon Insurance Division, the entity that reviews health benefits in the state. If approved, the rate hike would take effect on Nov. 1.
The boost comes after a 5-percent reduction last year by the Portland-based insurer. That followed four years of increases that ranged between 12 and 25 percent.
Michael White, chief operating officer for Providence's health insurance division, says last year's decrease added pressure on the health plan this year. White says the federal mandates will "have value" for members, but getting them started will incur expense. Providence has asked to increase rates for women’s preventive care by 1.1 percent to reflect the new coverage.
Officials at the Oregon State Public Interest Research Group say they will be keeping an eye on the Providence request.
Providence is not the only health insurer seeking to raise prices.
Citing a rise in medical and prescription drug costs, Regence BlueCross BlueShield executives are planning to raise rates an average 9.6 percent for Oregonians who buy their own insurance.
"We are simply putting our finger in the dam and hoping that the water stops flowing," Don Antonucci, Regence's Oregon president, told insurance regulators in late July.
New York-based Capital District Physicians' Health Plan is looking to raise premiums on its small group insurance plans by an average of 9.3 percent.
The health insurance industry is not for the faint of heart. Bloomberg News reports that UnitedHealth Group Inc., the largest U.S. health insurer, says profit margins are being squeezed in Medicare and Medicaid plans.
Vickie Williams, a health law expert at Gonzaga University, says health insurance rates nationwide have been rising for more than a decade, driven by more use of increasingly expensive technology.
"Because our reimbursement system basically rewards providers who perform more, rather than fewer, procedures, there is pressure on the providers to do more things and use expensive medical technologies — like MRIs and robots for surgery — to increase their reimbursement, regardless of whether the use of these things makes for better patient outcomes," Williams says. Adding to the cost, drug companies push their most expensive products to patients and doctors.
Williams does observe that insurers are uncertain about how health care reform will affect their business, so are raising rates to build up cash reserves just in case.
But the real problem, she says, comes because the system rewards procedures performed, not health outcomes.
Catholic and other religiously affiliated systems and plans don't keep costs lower than anyone else, Williams says.