R.I. health insurance rates are going up next year, but not as much as insurers wanted

Blue Cross Blue Shield of Rhode Island is one of the health insurers with rate increases for 2025. Seen here are the company’s offices on Exchange Street in Providence. (Alexander Castro/Rhode Island Current)

More than 170,000 Rhode Islanders will see their monthly health insurance costs rise next year, but not by as much as private insurers wanted.

Newly approved 2025 rates unveiled by the Rhode Island Office of the Health Insurance Commissioner on Tuesday feature year-over-year increases ranging from 1% to 14% depending on the type of insurance and the provider. The approved premiums will reduce residents’ costs by a combined $29.6 million in 2025, compared with the higher increases requested by commercial health insurers.

The initial rate hikes pitched by insurers in May drew sharp criticism from Rhode Island Attorney General Peter Neronha, who urged state regulators to deny what he blasted as “astronomical” increases. Neronha’s initial criticism focused on Blue Cross Blue Shield of Rhode Island, which was the only individual market insurer to ask for a double-digit rate increase.

Blue Cross, in turn, defended its requested 14.3% rate hike for the 17,000 enrollees on its individual insurance plan, pointing to soaring drug costs and medical services, which resulted in a $26 million operating loss in 2023, the company said.

After an independent review, Neronha later decried rate hikes proposed by the other five private insurers, some of which proposed even steeper premium hikes; UnitedHealthcare of New England topped the list with a requested 22.7% increase for its small-group market, which affects 1,644 residents on small-business insurance plans.

Rhode Island Health Insurance Commissioner Cory King acknowledged the competing arguments from health insurers and ratepayer advocates like Neronha.

“Each year my office must strike a difficult balance between affordability, the funding needs of the health care delivery system, and insurer solvency,” King said in a statement. “Rising premiums negatively impact Rhode Islanders’ economic well-being. When insurers pay more for health care goods and services, premiums go up. Addressing the rising cost of healthcare is a core focus of my office, and we will continue our work with health care providers and insurers to lower Rhode Islanders’ health care costs.”

Blue Cross President and CEO Martha Wofford called the approved rates “concerning” and warned of further financial shortfalls next year.

“Healthcare costs in Rhode Island are soaring. We have experienced 20% growth in medical and drug costs since 2023, which is far outpacing premium increases OHIC approved last year,” Wofford said in a statement on Tuesday. “We are highly focused on improving affordability and the last thing we want to do is increase rates for our customers and members, however, it is imperative for healthcare stability in Rhode Island that OHIC establish premiums that adequately cover surging costs.”

Neronha’s office did not immediately respond to inquiries for comment on Tuesday. Most of the approved rates are lower, or on par, with the increases suggested by his office.

The rates do not apply to self-funded employer groups, which account for approximately 65% of Rhode Island’s employer-sponsored coverage, according to OHIC. Self-funded employers pay employee health expenses directly, but they also rely on health insurers for administrative services.      

Affected enrollees in individual market plans will see premiums rise by a weighted average of 7.8% next year — with an approved 11% hike for Blue Cross enrollees. The average, weighted small-group market rate increase is 12.4%, while enrollees in large-group markets will see average, weighted increases of 11.2%.

The steepest annual premium hike will be borne by the 1,644 small-group market members enrolled in a UnitedHealthcare plan, for whom rates will rise 14%. The smallest annual increase is for large-group market enrollees under Cigna Healthcare, who will see a .9% rise in 2025 rates.

Premiums are calculated based on the claims that private insurers make to hospitals, physicians and pharmacies for treating their enrollees. Premium increases are driven by increases in use of services, and the intensity of services, along with higher reimbursement rates, according to OHIC. Administrative charges can also spark requested premium increases by insurance companies; the approved 2025 rates rejected all administrative-related increases that exceed inflation.

Elizabeth McClaine, vice president of commercial health care products for Neighborhood Health Plan of Rhode Island, said in a statement that the company respects state regulators’ annual review and approval process.

“We set rates to balance cost to members and reimbursement to providers while ensuring access to high quality care,” McClain said in an email. “Neighborhood takes seriously its role to ensure cost is not a barrier to high quality services.”

UnitedHealthcare declined to comment. 

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