Oregon’s new state-based insurance marketplace features the two useful examples of how policy making is impacting regular Oregonians in ways that don’t typically make headlines. It is an example of the “push and pull” involved in making policy — with both inflationary and deflationary pressures baked in.
What does make headlines, of course, is the approved 21.6% rate increase for 2027 for the individual market. But, under that topline number are other factors influencing costs.
For this note, let’s explore two much smaller policy decisions and their outcomes.
First, the proposed rules for the Oregon Reinsurance Program’s (ORP) Plan Year 2027 were issued recently, with a public hearing set for September 22nd.
The ORP provides a backstop to individual market losses, helping to stabilize the market for carriers and thus lower costs for consumers.
This is a product of Oregon’s 1332 Innovation Waiver, a tool that continues to underpin the markets in Oregon. From the proposed rule:
“Continued operation of ORP is projected to continue lowering individual insurance premiums by a net of 9.7%. This will have a financial benefit for consumers in the form of increased choice and lower premiums for at least some insurance purchasers.”
On the one hand, this is a rule that maintains the status quo for health insurance in Oregon from plan year 2026.
On the other hand, it’s important to celebrate the wins sometimes. This is a policy, funded by state and federal dollars, that quietly keeps prices 9.7% lower for consumers than they otherwise would be in Oregon.
Second, the policy decision to move to a state-based exchange is not without some costs.
In fact, those costs appear to amount to about a 4.3% cost load consumers must carry.
Specifically, as I mentioned elsewhere, the new Oregon state-based insurance exchange is set to tack on an additional $35.60 for every consumer. Though a hearing on this is scheduled for September 17th, it’s likely an amount comparable to this number will be applied come January 1. The exchange needs funding to operate and this will be a primary revenue source for the program.
To be fair, this $35.60 pmpm in new costs from the state-based exchange replaces the $6.85 state fee applied in 2026 to the federal marketplace. There was also a federal fee of 2.0%, or what I figure is about $14.77 pmpm, which will go away in the new state-based exchange model.
So, the more accurate “net” cost increase is about $14 pmpm, cost increase of about 2.9% to 4.3% for consumers — still real money for consumers which will pay this amount monthly in their insurance premiums.
The bottom line is simply this: this is an example of policy making impacting the health care market in ways that push and pull on costs.
There are few simple answers. And, even those issues on which many agree (operating an exchange with a reinsurance product for the individual market) can have complex policies which influence the issue in ways that are missed in most reporting and headlines.
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