Rhode Islanders will face higher health insurance premiums in 2024 despite the slowing inflation rates. State regulators have approved rate increases for the largest insurance companies, although with modifications, in an effort to save residents an estimated $23.8 million compared to what insurers initially requested. The Office of the Health Insurance Commissioner (OHIC) calculated the savings, as it has the final say on how much insurance rates can increase.
In May, health insurers proposed rate increases ranging from 4 to over 16 percent. However, Acting Health Insurance Commissioner Cory B. King announced on Friday that the approved rate increases will range from less than 1 percent to more than 10 percent. King acknowledged that the proposed increases by insurers were “very significant” and emphasized the importance of all stakeholders working together to promote affordable healthcare for all Rhode Islanders.
The modified proposed rates reflect OHIC’s efforts to reduce insurers’ administrative charges and requested profit. For example, UnitedHealthcare of New England initially requested a 16.1 percent rate hike in the small group market, but OHIC reduced it to 8.3 percent. Similarly, Harvard Pilgrim Health Care asked for an 11.9 percent increase, which was shaved down to 7.9 percent. King admitted that one insurer expressed concern about OHIC cutting the small group market contribution to reserve/profit margin to zero, but did not disclose the insurer’s name.
In the large group market, Aetna proposed a 6.6 percent increase for its 60 customers in the state. However, King reduced their rate increase to just 0.3 percent. King explained that OHIC felt Aetna’s medical utilization and severity trend assumption was inflated compared to the rest of the market, leading to the adjustment. Aetna, owned by Woonsocket-based CVS Health, did not comment on the rate adjustments.
Prior to Friday’s announcement, Attorney General Peter F. Neronha filed objections in August to several rate increase requests by insurers, including Blue Cross Blue Shield of Rhode Island, which has the largest share of members among commercial insurers in the state. Neronha argued that the proposed increases were not justified given the current economic conditions and the financial strength of the insurers.
King highlighted the impact of inflation and labor costs on rising healthcare expenses, stating that patients are increasingly returning to medical appointments three years after the pandemic. The approved rate increases were primarily driven by the cost of healthcare, including the increased use of healthcare goods and services.
While Rhode Islanders will still face higher health insurance premiums in 2024, the modifications made by OHIC aim to lessen the financial burden on residents. As healthcare costs continue to rise, it remains crucial for all stakeholders to work together to ensure affordable and accessible healthcare for all.