PROVIDENCE — Inflation rates may have slowed, but the cost of health insurance premiums keeps ticking up in Rhode Island.
Months after health insurance companies initially requested the state approve steep rate increases in May for 2024, citing higher health care and labor costs, state regulators announced Friday that they have approved increases for the largest companies, but with modifications.
Rhode Islanders will save $23.8 million in 2024 compared to what commercial health insurers requested, according to an internal calculation by the Office of the Health Insurance Commissioner, which makes the final decision on how much insurance rates can increase, if at all.
In May, health insurers proposed rate increases ranging from 4 to more than 16 percent. The rate increases Acting Health Insurance Commissioner Cory B. King announced Friday range from less than 1 percent to more than 10 percent.
“I firmly believe that all stakeholders, including health insurers, health care providers, and government must share accountability for promoting affordable health care for all Rhode Islanders,” said King. In an email to the Globe, King characterized the insurers’ proposed increases as “very significant.”
The Individual, small, and large group market premium rates will go into effect next year.
King said the modified proposed rates reflect cutting insurers administrative charges, and reduce their requested profit. For example, in the small group markets, UnitedHeathcare of New England requested a 16.1 percent rate hike, which was reduced by OHIC to 8.3 percent. Harvard Pilgrim Health Care requested an 11.9 percent rate hike, which OHIC shaved to 7.9 percent.
“I spoke with one insurer that expressed concern that I cut the small group market contribution to reserve/profit margin to zero,” King told the Globe. He did not identify the insurer.
In the large group market, Aetna proposed a 6.6 percent increase for its 60 customers in the state. King shaved their rate increase to just 0.3 percent.
“We felt that Aetna’s medical utilization and severity trend assumption was inflated,” said King. “It was certainly much higher than the rest of the market, so we reduced that assumption.”
A spokesperson for Aetna, which is owned by Woonsocket-based CVS Health, did not respond to the Globe for comment.
Prior to Friday’s news, Attorney General Peter F. Neronha filed official objections in August to several rate increase requests by the companies, including Blue Cross Blue Shield of Rhode Island, which has the largest share of members in the state among commercial insurers.
“We believe [the proposed increases] are not justified given the current economic conditions and the relative financial strength of the health insurers,” Neronha said at the time.
Three years after the pandemic, King said as inflation and labor costs skyrocket, patients are increasingly returning to medical appointments. The approved, modified premiums were predominantly driven by the cost of health care, which includes increased use of health care goods and services, he said.
Here are the approved rate increases by OHIC by market, compared to what insurance companies initially requested for 2024.