Oregonians signed up for individual or small group health plans got some good news last week when the state announced their final rate decision will lower premiums in 2020 by $44 million.

The final rates for next year are 2% lower than the original request filed by insurance companies in May and 1% lower, on average, from the division’s preliminary rate decisions.

“The rate increases over the years have been high and the costs for insurance can be something difficult to pay,” said Brad Hilliard, public information officer for Oregon Division of Financial Regulation.

The division regulates insurance rates through a two-month review process with an open public comment period. Through that process the state determines to what extent insurance providers can raise or lower their rates, Hilliard said.

The division issued final decisions for seven companies in the individual market with average rate changes ranging from a 3.2% decrease to an 8.9% increase, for an average increase of 1%. Under the decisions, Silver Standard Plan premiums for a 40-year-old in Portland would range from $436 to $530 a month.

The division encourages everyone to apply for federal subsidies if they don’t qualify for the Oregon Health Plan through Medicaid.

“We encourage everyone to apply,” Hilliard said. “The vast majority who do qualify for financial help for their health insurance.”

The state’s announcement gives those who work for businesses with fewer than 50 employees or are self-employed several months to look over the available policies ahead of the enrollment period between Nov. 1 and Dec. 15.

Since the Affordable Care Act instituted the individual and small group markets rates have greatly fluctuated, but are becoming more stable and sustainable, Hilliard said.

To determine premium rates Hilliard said health insurance companies that offer plans for individuals and small groups submit financial reports with enrollment numbers to his division, kicking off a review process each year in mid-May. The state’s actuaries look over the requests and consider a broad range of factors like medical loss trends.

If the numbers don’t add up, Hilliard said the state pushes back on the insurance companies and determines what they can charge. Several factors, such as medical costs, federal policy changes, the Oregon Reinsurance Program, and federal risk adjustment payments are considered to make sure rates will adequately cover health care costs.

The reinsurance program — insurance for insurance companies, Hilliard said — has helped lower rates overall by 6% a year.

During the public hearings each insurance company will state their case and hear what the division has to say about it, Hilliard said.

“We take into account loss trends and claims to predict future claims and to determine what rates should be — not too high, but high enough to cover costs,” Hilliard said.

Insurance companies have 21 days to request a hearing before the final rates are set for 2020.

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