Obamacare Exchanges Already Forcing Private Insurers To Lower Their Premiums

From Oregon, which in many ways is fast becoming a model for how to do health reform right (their recently released low back pain guidelines are also excellent):

In a striking illustration of the promise that the health law holds for consumers, two Oregon private insurers vying to sell coverage on the state’s Obamacare insurance marketplace this October are reevaluating their opening bids for the plans’ monthly premiums. The reason? A side-by-side regional comparison of all proposed 2014 premiums for Oregon marketplace plans became public on Oregon’s marketplace website Thursday, and showed that the two insurers’ planned monthly premiums were far higher than other proposals. That raised fears among the companies’ officials that their plans wouldn’t be competitive on the market later this year, leading them to proactively request a rate reduction — and as more of Obamacare is implemented, state insurance commissioners expect that trend to continue:

“Posting rate comparisons company-by-company is a taste of what is to come,” says Cheryl Martinis of the Oregon Insurance Division.

Judging by the reaction, there’s already an impact.

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.

“That was my question when I saw the rates was, ‘Can we go in and refile these?’” he said. “We’re going to try to get these to a competitive range.”

Although some insurers have been using Obamacare as an excuse to hike premiums despite record profits, such rate hikes have been rarer — and less extreme — since the law’s passage.