Oregon’s filing and the ACA in 2022

Louise Norris digs out the initial Oregon rate filings for the 2022 plan year:

Oregon’s six marketplace insurers have proposed an average rate increase of 1.8% for 2022. PacificSource will expand statewide, joining 3 other insurers that already offer plans statewide (and Cigna will join the small group market) https://t.co/PcinMWFVbH @charles_gaba

— Louise Norris (@LouiseNorris) May 20, 2021

There are a few generalizable take-aways from the initial rate filing (remember, these numbers will change as new information comes in).

• Insurers are entering the market
• Rates are likely to be changing at general inflation levels and not medical inflation levels
• Competition is likely to increase

From these basic points, we can make some of the following assumptions.

Premium spreads are likely to compress further so the discounts available will be based almost entirely on the revamping of the ACA subsidies with ARA subsidy enhancements.  We should also expect to see a decrease in average risk score as the combination of the new subsidies and the very extended SEP for new enrollees are likely bringing in a whole lot of people who either were not paying attention to insurance in December 2020 or had made a rational choice that the premium to value proposition was not favorable to them at the former ACA subsidy levels.  These classes of folks (the marginal enrollees) tend to be as healthy as a horse relative to the average enrollee.  Furthermore, the extension of COBRA subsidies is likely to pull out of the market some people who were likely to have enrolled due to an SEP who would have had fairly significant medical needs.  These interactions are likely to keep Medical Loss Ratios fairly low in 2021 and the enrollment inertia is likely to keep the risk pools pretty healthy.

I don’t think these are Oregon specific factors.  I think these are the types of stories we will see in most rate filings across the nation this year.