Competitive Pricing in Oregon is a Test Case for Obamacare
Bad news about the implementation of Obamacare seems to pop up relentlessly. So here's some good news to balance it out. Once the exchanges get up and running, insurance companies for the first time will be offering similar products with very public prices, and in Oregon those prices vary from $169 a month to $422 a month for the same standard plan. Here's what happened last week when those prices went online:
On Thursday, a comparison of proposed 2014 health premiums became public online, causing two insurers to request do-overs to lower their rates even before the state determines whether they're justified.
The unusual development was sparked by a comparison that used to be impossible because plan benefits varied so widely. But under the federal reforms that take effect Jan. 1, health insurance is mandated and every insurer must offer certain standard plans.
....Providence Health Plan on Wednesday asked to lower its requested rates by 15 percent. Gary Walker, a Providence spokesman, says the "primary driver" was a realization that the plan's cost projections were incorrect. But he conceded a desire to be competitive was part of it.
A Family Care Health Plans official on Thursday said the insurer will ask the state for even greater decrease in requested rates. CEO Jeff Heatherington says the company realized its analysts were too pessimistic after seeing online that its proposed premiums were the highest.
The news isn't all good. Overall, rates in the individual market are likely to go up because insurance companies have to cover those with preexisting conditions and are required to offer a minimum set of benefits. But transparency is also likely to drive prices of some policies down. That's competition, baby.