Get ready for some of the steepest insurance premium surges in the country.
Let’s start with the good news: Oregon is still one of the cheapest states for health insurance.
The bad news? In 2016, the state’s benchmark silver rates for individual and small group plans will skyrocket by an average of 23 percent.
That’s more than three times the 7.5-percent average for all 37 states served by HealthCare.gov, the Affordable Care Act (ACA) platform, according to data from the U.S. Department of Health & Human Services. Only six other states will see steeper increases.
Why the sudden leap? According to state actuaries, insurance claims in 2014 exceeded premiums by $127 million. Moda Health Plan, Oregon’s largest insurer with 101,000 members, lost $4.3 million. Insurance Commissioner Laura Cali said 2016’s markups are intended to “protect consumers from extreme rate increases in the future.”
Individual plans will take the biggest hit. Every ACA-compliant plan will increase, with average premium hikes ranging from a low of 8.3 percent (Kaiser Foundation Health Plan of the Northwest) to a high of 37.8 percent (Health Republic Insurance Company).
Small group plans, while generally more expensive, will see less of an overall increase. Premiums under six plans will actually drop in price, with Kaiser’s -7.6 percent being the most significant. Health Republic Insurance Company faces the steepest small-group increase at 15 percent.
All of this boils down to financial strains for many small businesses. Insurance hikes limit employers’ options significantly, said NFIB State Director Anthony Smith.
“When you have one line item completely out of your control, you have fewer options when it comes to making decisions like hiring a new person or expanding to a bigger market,” he said.
As of October, 467 small employers in Oregon—defined by the state as employing 50 or fewer workers—provide health insurance to a total of 2,862 employees through the Obamacare Small Business Health Options Program (SHOP). Many of the plans available through SHOP, which lets employers with fewer than 25 employees receive insurance tax credits, face major price hikes next year. Moda’s premiums will jump an average of 25.6 percent.
Still, health insurance in Oregon is more affordable than in most states. And not all small businesses buy coverage on SHOP—some find it more cost effective to let their full-time employees purchase insurance independently.
But if your small business has 50 or more employees, take note: Starting in 2016, you’ll have to pay a fine of $2,160 per full-time worker if you don’t provide insurance coverage to 95 percent of your staff. NFIB can help you navigate your options during the ACA open enrollment period, which ends January 31.
