R.I. rejects and revises rate insurance increases from health insurers

Given the pandemic, the state’s health insurance commissioner said he did not feel it was “appropriate” for insurers to build in any contributions to reserves or profit into their increases

COVID-19 patient Sall Un, 40, left, is transported by EMT's Gabrielle Milliam and Allison Oliveros, from his room at Kent Hospital to recover at their nearby field hospital as another ambulance crew arrives with a stretcher.David Goldman/Associated Press

PROVIDENCE — Three months after health insurance companies requested the state approve steep rate increases that caused public outrage, Rhode Island’s health insurance commissioner announced that he rejected an average rate increase from the state’s largest health insurer and “significantly modified” others.

The Office of the Health Insurance Commissioner on Thursday morning released the individual, small, and large group market premium rates approved by the state’s insurers. The requested rate increases ranged from less than 3 percent to nearly 20 percent, which had initially left Health Insurance Commissioner Patrick Tigue “concerned.”

During his review, he rejected all charges for profit and contributions to the reserves in the 2022 rates, citing the continued impact that the COVID-19 pandemic has had on Rhode Islanders — both for their health and financial well-being. This included Blue Cross Blue Shield of Rhode Island, which has 40,255 members as part of its small group plan and requested an average rate increase of 2.9 percent for 2022. Tigue rejected it, and approved a 0.3 percent decrease. This means that some BCBSRI members may see their rates actually go down relative to last year.

Tigue told the Globe that, given the impact of the pandemic, he did not feel it was “appropriate” for BCBSRI to build in any contributions to reserves or profit into their small group plan, or any others. He said any charges for profit and contributions to reserve for next year would not be consistent with the “proper conduct the insurers’ business or consistent with the public interest.”

“I also felt that Blue Cross had estimated far too high an increase in expected utilization of health care services leading to high costs,” he said.

The state’s second largest health insurer, Neighborhood Health Plan of Rhode Island, requested a 8.5 percent rate increase for individual markets and a 6.5 percent rate increase for small group markets, and Tigue approved for a rate increase of 3.5 percent and 1.5 percent, respectively.

UnitedHealthcare requested the largest increase for 2022 among all insurers at 17.5 percent under their HMO plan and a 10.7 percent rate increase under their PPO plan. Tigue approved much smaller increases: a 7.8 percent increase for the HMO plan and just a 1.3 percent bump for the PPO plan.

The rate increases come after nearly a month of public comments were submitted to the office, demanding to keep health insurance rate hikes low or to completely reject them.

Gail Carvelli, a spokeswoman for BCBSRI said the company accepted the commissioner’s modifications and that the company did recognize the ongoing economic challenges that its members faced due to COVID-19. Which is why, Carvelli said, the company submitted “the lowest rate among commercial carriers for individual and small group and the second lowest for large group.”

”We base our rates on several factors, including the cost and number of healthcare services and our members’ use of prescription drugs,” she said.

Rep. David Morales, a Providence Democrat, sent a letter to the office that was signed by more than a dozen lawmakers and more than 150 Rhode Island residents, asking the office to reject the rate hikes proposed by insurers.

In the letter, Morales and others wrote that the increases would “hurt the working people and middle-class families of Rhode Island.”

“As the pandemic has shown, now more than ever, we need our residents to be cognizant of their health by regularly visiting their doctor, whether it is in-person or virtually through telemedicine,” read the letter. “If these proposed health insurance rate hikes are approved, however, this would only harm the health of our communities and further contribute to economic insecurity.”

“It is disingenuous for these health insurance companies to claim that these hikes are for the purpose of simply matching expected medical cost increases while the salaries and bonuses of their wealthy executives continue to increase,” the letter read.

Attorney General Peter F. Neronha, who was vocal when former health insurance commissioner Marie Ganim, who has since retired, approved rate increases for 2021 last summer, issued a statement Thursday.

He said that his office had objected to all requests by insurers to raise any health insurance rates for Rhode Islanders across the board— citing concerns about affordability during the ongoing pandemic, the frequency of “substantial” rate increases, and adverse impacts on “minority communities already suffering from economic and health inequities.”

“While I still firmly believe that no rate increases are justified, I am encouraged to see that the Office of the Health Insurance Commissioner took into account affordability as a factor in denying requested rate increases from health insurers,” said Neronha. He said he and the office will continue to be a “critical advocate” for Rhode Islanders on the issue.

Letters from advocates, organizers, and political parties were also sent to the office.

“Given the immense profits of the health insurance industry, even throughout the pandemic, there is absolutely no need to increase premium hikes on working families,” read a letter from the Rhode Island Working Families Party. “Instead, we should be prioritizing a more just economic recovery for workers, ensuring our neighbors are housed, and healthcare accessible for all.”

Megan Cotter, an Exeter Democrat running for state representative, wrote to Tigue’s office, “To raise insurance rates by as much as 17.5 [percent] during a global health crisis is an insult to every Rhode Islander.”

Tigue acknowledged the public outcry to the Globe, and said it really had a “strong bearing on why I made the modifications that I did.”

While none of the requested insurance rate increases were accepted in full, many of the companies still saw approved increases. Tigue said that while the office is committed, this year and in the future, to achieve the “most affordable rates as possible,” that he has an obligation that health insurers in Rhode Island take in enough of a premium to be able to cover the medical expenses that they expect to have to pay out.

“It’s my responsibility to balance these two things. While trying to keep rates as affordable as possible, I have to make sure insurers stay financially healthy and are able to financially care for the Rhode Islanders that need it,” he said. “Our work isn’t done though. We have to double down on all efforts in the state to make health care as affordable as possible. To me, this is a first step, but certainly not the end of a process.”

Tigue added, “People should expect us to push as hard as possible on affordability, not only in our administrative review process but also in the broader policy reform that the office is leading.”