- The new rates will affect over 170,000 Rhode Islanders enrolled in individual, small group and large group markets
- OHIC cut rates in nearly every category, in some cases slashing the rate by more than half
- Insurers are disappointed with the new rates, saying they do not keep up with growing medical and drug costs
Thousands of Rhode Islanders will pay higher premiums for their health insurance coverage next year, though not as high as insurers would like.
Rhode Island’s Health Insurance Commissioner Cory King approved new insurance premium rates for 2025, according to a news release from OHIC.
How much are RI insurance rates increasing?
On average these are the approved increases:
- 7.8% for the individual market
- 12.4% for the small group market
- 11.2% for the large group market
The rate changes will affect over 170,000 Rhode Islanders enrolled in individual, small group and large group policies and not covered by employer-sponsored coverage.
The rates, however, are lower than what insurers requested. In fact, in nearly every category OHIC reduced the proposed rate, in many cases slashing rates below those recommended by Attorney General Peter Neronha, who opposed the rate hikes.
“Each year my office must strike a difficult balance between affordability, the funding needs of the health care delivery system and insurer solvency. Rising premiums negatively impact Rhode Islanders’ economic well-being. When insurers pay more for health care goods and services, premiums go up,” King explained in a statement.
Why are premiums going up?
OHIC explained the primary driver for premium increases are claims payments health insurers make to providers.
“These payments account for 82 cents on the premium dollar, on average,” the news release said.
The claims are in turn influenced by three main factors: increased use of services – such as hospital admissions and outpatient surgeries – higher reimbursements and higher intensity services.
“To lower rates, OHIC reduced medical trend and severity assumptions, rejected insurer administrative cost increases that exceeded the rate of inflation, and modified insurer requested margin,” according to the press release.
What is my rate if I have Blue Cross & Blue Shield?
Blue Cross & Blue Shield of Rhode Island is the largest insurer in the small and large group markets and the second-largest in the individual market. OHIC approved the following rate increases, compared to those requested by the insurer:
- Individual: 11% (14.3% requested)
- Small group: 12.9% (15.6% requested)
- Large group: 11.3% (13.5% requested)
What about other insurers?
OHIC also approved rates for other insurers, among them NHPRI, the largest insurer in the individual market, and UnitedHealthcare, the second-largest insurer in the large group market.
For NHPRI’s individual market, OHIC approved a rate increase of 5.9% – the only rate green-lighted above what the insurer originally asked (5.6%).
OHIC also approved a rate increase of 10.6% for UnitedHealthcare in the large group market, down from 14.9% requested by the insurer.
A full breakdown of the rates OHIC approved is available at the agency’s website.
Insurer concerned over OHIC’s reduced approved rates
In a statement provided by Blue Cross & Blue Shield of Rhode Island, President and CEO Martha L. Wofford expressed concern over the reduced rates approved by OHIC.
“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,” Wofford said.
Wofford explained BCBSRI has seen 20% growth in medical and drug costs since 2023, which is outpacing the premium increases OHIC approved last year. Surges in medical services – such as musculoskeletal surgeries and cardiac care, among others – and rising pharmaceutical costs are behind this growth, according to BCBSRI.
The statement added that BCBSRI had an operating loss of $26 million in 2023. The insurer projects a “significant budget gap” for this year and “further financial shortfalls” next year due to the premiums approved by OHIC.
