The business of nonprofit health insurance aint what it used to be. Oregons largest health insurer, Regence BlueCross BlueShield, has invested millions of dollars in for-profit companies in recent years under the auspices of its parent company. During the same period it has cut back on the number of people it actually insures in its four-state region.
Since 2007, Regence has shed more than 650,000 members in the individual and group market in Oregon. Its membership has fallen by more than 425,000 in Washington, Idaho and Utah. In the face of criticism, Regence last month backed off plans to restrict 20,000 Portland-area individual members to just two smaller hospital networks, sparing many from having to choose between their physician, higher costs or a new insurance provider.
The insurer recently filed for a 9.6 percent rate increase with the Oregon Insurance Division for roughly 53,000 people who buy individual coverage — not those on Medicare or who get coverage through an employer. The investment strategy for Regence doesnt pose any regulatory problems, but some who follow the insurance world worry about the increased risk nonprofits take on when they venture into the volatile world of early-stage investments.
Neal Wallace, associate professor in the Division of Public Administration at Portland State University, said its a legitimate question to ask if such an approach supports the companys core health insurance business in ways that maintain care and reduce premiums as effectively as other strategies.
When Regence collects premium dollars from its members and invests those dollars, he said, “the intent is to gain returns that help pay claims.” “The real question in following the trail of this money is whether these new businesses provide a fair return to their core health insurance business,” he said. Regences parent company, Cambia Health Solutions, issued a statement Friday. “The health care landscape is changing faster now than perhaps it ever has,” the statement said. “While health insurance remains core to who we are, we recognize the needs of yesterday are not the needs of tomorrow.
Regence is now part of a family of companies devoted to a shared vision of personal health and wellness, reduced medical costs, enhanced consumer choice and improved quality of care. Cambia Health Solutions strives to be an innovator for individuals, families and business by providing tools, products, information and services that can lead to better health outcomes for our members and curb the rising cost of care. We are driven by the strong nonprofit values that have guided us for more than 90 years.”