BEND, Ore. — In a last-ditch effort to get more insurance carriers to sell individual policies in Central Oregon, state regulators worked out a deal that’s proving to have unintended consequences here.
In addition to letting the carriers sell their policies at higher monthly prices, regulators told the carriers to limit their offerings to a type of policy that does not allow contributions to health savings accounts, tax-advantaged accounts that help people pay for out-of-pocket medical expenses their health insurance policy doesn’t cover.
That means anyone in Deschutes, Crook or Jefferson County who buys a 2017 individual health insurance policy — the ones people buy for themselves or their families — won’t be able to add money to an HSA. They will, however, be able to withdraw money from those accounts.
“It stinks,” said Jason Epple, a principal with Century Insurance Group in Bend.
HSAs are especially popular among self-employed people, Epple said. Some of his clients have been contributing to their accounts for years, and he said they work very well for some people.
“It’s not going to be a very fun conversation for all of us to call our clients and tell them they no longer are going to be able to participate in the plan that they’ve enjoyed participating in for so many years,” Epple said.
Lisa Morawski, a spokeswoman for the Department of Consumer and Business Services, which regulates health insurers in Oregon, said that to allow new carriers to re-enter the Central Oregon market, regulators needed to examine their policy offerings on an even playing field.
That meant letting them sell only standard bronze, standard silver and standard gold policies. The state regulates standard policy benefits, which are the same across carriers.
“With the time that we had, it just worked well to only have them offer standard plans,” she said.
To contribute to HSAs, people must be covered under health insurance policies that meet criteria outlined by the Internal Revenue Service.
None of the standard policies offered locally meets that criteria. PacificSource Health Plans is also selling a catastrophic policy locally, but it is not HSA-eligible.
Morawski said regulators were aware of the HSA issue during the negotiation process, but the bigger priority at the time was getting carriers to agree to return to Central Oregon. Prior to the negotiations, Deschutes County faced having only two carriers selling individual policies here, the fewest of any county in the state.
“We know that these plans are important to people and they’re useful, so we are looking at what we can do in the future,” she said.
Regulators are trying to work out a solution for 2017, but because open enrollment is already underway, Morawski said that’s unlikely to happen.
“Definitely we would look at it for 2018 plans and do what we can to make sure there are HSAs available,” she said.
Ruth Rogers Bauman, the CEO of Atrio Health Plans, one of the carriers that will sell individual policies in Deschutes County next year, said making a change in time for 2017 would be difficult, but she’s open to the possibility of selling an HSA-qualified policy.
“They might allow us to do it off the exchange because then we don’t have the same restrictions,” she said. “We can certainly have that conversation.”
HSAs are designed for people whose health insurance policies have high deductibles — that’s the amount people have to pay before the insurer starts to pay for a portion of their medical costs. Since those policies generally require people to pay for a lot of their own medical care, they can add money to the account that’s tax deductible and use it on medical expenses later. Any money that’s withdrawn from the account is tax-free.
Despite its unintended consequences, the state’s deal with carriers was successful in encouraging them to sell individual market policies here.
The Department of Consumer and Business Services persuaded three more carriers — Providence Health Plan, Regence BlueCross BlueShield of Oregon and BridgeSpan Health Co. –to sell in Deschutes, Crook and Jefferson counties. Atrio Health Plans also agreed to sell in Deschutes County.
Six carriers will sell individual health insurance policies in Deschutes County next year; five will do so in Jefferson and Crook counties.
