Rhode Island Faces Historic Health Insurance Premium Increases

Categories: Rhode Island Business NewsRhode Island News

An abstract representation of rising healthcare costs for insurance premiums.

News Summary

Rhode Island residents may face significant health insurance premium hikes, with proposed increases for individual market coverage reaching up to 28.9%. These hikes could affect over 170,000 individuals, driven by rising healthcare costs and the anticipated expiration of federal tax credits. The Office of the Health Insurance Commissioner will make final decisions by September 2025, following public hearings for feedback. This marks the highest rate increase requests in over a decade.

Rhode Island residents may face serious financial challenges as private health insurers in the state have submitted requests for the highest health insurance premium increases in over a decade. These requests could impact more than 170,000 individuals, with potential increases for individual market coverage ranging from 21.2% to 28.9% for the year 2026. For small group plans, the requested hikes range from 20.3% to 22.2%, while large group plans could see increases between 13.5% to 26.4%.

These upcoming rate increases represent a significant escalation compared to last year’s requests, which ranged from 8.8% to 15.4%. The final decisions regarding these requests will be made by the Office of the Health Insurance Commissioner (OHIC), with announcements expected by September 2025.

Contributing Factors to Rate Increases

The insurers have cited several factors driving the steep rate increases. Notably, there has been a general rise in health care service costs, especially concerning hospital payments and prescription drugs. The increased utilization of glucagon-like peptide-1 (GLP-1) drugs, such as Ozempic and Wegovy, for weight loss has also contributed to the financial pressures.

Additionally, economic challenges, including tariffs affecting the prices of imported drugs, are cited as another contributor to the proposed premium increases. Insurers are also concerned about the anticipated expiration of federal Enhanced Premium Tax Credits, which currently help lower premiums for approximately 30,000 Rhode Islanders. The projected expiration of these credits alone is expected to inflate the requested rates significantly, with Blue Cross Blue Shield of Rhode Island (BCBSRI) forecasting nearly a 10% increase and Neighborhood Health Plan of Rhode Island (NHPRI) estimating an approximate 5% hike.

Impact on Insurers

BCBSRI, the largest insurer in Rhode Island, has recently reported a 20% increase in health care spending over the last two years. The insurer is also facing its own financial challenges, having posted a net loss of $115 million for the year 2024. To manage operating costs, BCBSRI has laid off 3% of its staff. The organization must balance the need for affordable premiums for consumers with the necessary funding for health care providers and overall insurance solvency, as highlighted by OHIC’s commissioner, Cory King.

Changes in Oversight and Public Involvement

In a significant shift from prior practices, the attorney general’s office has decided not to conduct an independent actuarial review of this year’s rate filings. This move aims to enable a greater focus on health care initiatives rather than detailed reviews of premium requests.

To ensure transparency and allow for public input, the OHIC has scheduled public hearings regarding these proposed rate increases. The first hearings will be held for BCBSRI on June 30 and July 1, followed by NHPRI on July 15 and 16. During these sessions, Rhode Island residents will have the opportunity to voice their opinions about the proposed rates and express any concerns regarding their health insurance coverage.

Conclusion

As Rhode Islanders brace for potentially significant increases in health insurance premiums, the process ahead will require careful scrutiny of the proposed rates by OHIC, along with public engagement during the scheduled hearings. The outcome of these deliberations will play a crucial role in shaping healthcare affordability for thousands of residents in the state.