Washington Insurance Commissioner Mike Kreidler has rejected requests by The Regence Group to increase the rates of three individual health insurance plans — including one offered in Clark County — his office announced Tuesday.
Regence BlueShield and Asuris Northwest Health — a subsidiary of Regence — had each requested a rate increase of 3.7 percent. Regence BlueCross BlueShield of Oregon, which serves about 30,000 members in Clark County, had requested a rate hike of 4.9 percent.
“Regence failed to make its case,” Kreidler said in a news release.
The insurer has the right to appeal Kreidler’s decision.
Samantha Meese, spokeswoman for Regence, said in an e-mail that the nonprofit is still considering its options. She said Regence bases its rate requests on a number of factors, including geography, the cost of care in a region, the unique characteristics of the pool of members in an area and the types of benefit plans offered to members.
Increase approved in Oct.
Health insurers are allowed to file a rate change for their individual health plans only once a year, with a few exceptions. In October, Kreidler accepted rate hikes of 16.4 percent for Regence BlueShield, 15.4 percent for Regence BlueCross BlueShield of Oregon and 23.7 percent for Asuris Northwest Health, according to Stephanie Marquis, a spokeswoman for Kreidler. In recent years, most insurers have requested and won double-digit rate hikes, Marquis said.
Additional rate changes are allowed if the plan is required to offer new benefits.
In November, Regence asked Kreidler to allow a second rate increase for its three subsidiaries’ individual health insurance plans in response to changes tied to federal health care reform, Marquis said. But Kreidler rejected the nonprofit’s request, disagreeing with the rate amount Regence said it needed to cover all health conditions of the children they enroll — no exclusions for such pre-existing conditions as asthma are allowed under new federal requirements.
Although it asked to raise rates on current plans, Regence officials would like to replace these health plans with a new option called “Evolve” beginning next year.
Kreidler had concerns about that change, too, Marquis said. Currently, Regence’s plans charge families two flat rates for children: a one child rate, and a two or more children rate. Under the new “Evolve” plans, Regence proposed charging per child, Marquis said, which means larger families would pay “significantly more.”
All other Washington insurers already charge for each child. But for Regence to do the same, it has to prove it’s not profiting from the change, Marquis said. Regence “did not show, in moving people over to the new plan, that they were not making money on that move.”
Kreidler’s action Tuesday affects 149,000 people who have individual plans with Regence. If those customers stay with Regence in January, they will pay the rate increases Kreidler approved in October — not the requested 2011 rates, according to Kreidler’s news release.
It’s unclear how many Regence members in Clark County are affected by Kreidler’s action.
Kreidler said he has “serious concerns with the rate change Regence proposed for covering new benefits for kids and the calculations it made for its replacement plans.”
“I’m committed to working with the company to see that its product is available to the public, but it must be fairly priced,” he said.