Rhode Island Health Insurance Premiums Set to Rise Sharply

Categories: Rhode Island Business NewsRhode Island News

Residents of Rhode Island facing significant health insurance premium increases.

News Summary

Rhode Island is facing significant health insurance premium increases, with proposed hikes of over 23% for individual and small group markets. Effective January 1, 2026, these hikes will impact over 170,000 residents. Major insurers attribute the increases to rising healthcare costs and regulatory changes. The impending decision by the Office of the Health Insurance Commissioner (OHIC) follows a public town hall discussion aimed at addressing public concerns. Additionally, a contract dispute could disrupt coverage for thousands in the state.

Rhode Island is facing significant increases in health insurance premiums as private health insurers submit their rate hike requests to the Office of the Health Insurance Commissioner (OHIC). Proposed average increases include 23.7% for the individual market, 22% for the small group market, and over 24% for the large group market, marking the highest premium hikes observed in over a decade.

These rate increases, which will be effective on January 1, 2026, will directly impact more than 170,000 residents who hold individual, small, or large group plans. In contrast, self-funded employer groups, which cover approximately 65% of Rhode Island’s workforce, are not affected by these requests.

The OHIC is set to announce its decision on the insurers’ rate requests by September. In the meantime, a virtual town hall aimed at gathering public comments will be held on Thursday, July 24, at 4:30 p.m. The OHIC has the authority to approve, modify, or reject the proposed premium rates during their annual review process.

Major insurers, including Blue Cross Blue Shield of Rhode Island (BCBSRI), Neighborhood Health Plan of Rhode Island (NHPRI), UnitedHealthcare, Harvard Pilgrim Health Care, Aetna, and Cigna, have filed requests for these increases. Such significant hikes are attributed to various factors, including rising healthcare costs for goods and services, increased utilization of weight loss medications, federal tariff impacts, and the impending expiration of Enhanced Premium Tax Credits. The latter is anticipated to add close to 10% to BCBSRI’s requested rates and almost 5% to NHPRI’s rates for individual market plans.

BCBSRI has reported a staggering 20% increase in healthcare spending over the last two years, which has resulted in a net loss of $115 million in 2024 and led to layoffs affecting 3% of its workforce. Additionally, the rate increases also reflect the necessity of higher payments to primary care providers, as mandated by new OHIC regulations.

It is important to note that the Rhode Island Attorney General’s office, which typically conducts independent analyses of rate filings, has announced it will not perform such reviews this year. This absence of independent oversight raises concerns amidst ongoing volatility in healthcare spending growth, making it increasingly challenging for insurers to accurately price their premiums.

Furthermore, recent penalties were imposed on three health insurers in Rhode Island for improperly charging patients for COVID-19 related care, which was supposed to be fully covered. UnitedHealthcare faced a penalty of $1 million, while BCBSRI and Aetna received fines of $20,000 and $10,000, respectively. These penalties were based on claims made from July 2021 to May 2023, with the collected funds being redirected to the state’s general fund.

A separate issue that could disrupt healthcare coverage involves a contract dispute between Brown University Health and UnitedHealthcare that could affect thousands of seniors and disabled residents across four Rhode Island hospitals starting July 1. To assist residents navigating these changes, Rhode Island Attorney General Peter Neronha has established a resource aimed at clarifying insurance coverage alterations.

As Rhode Island prepares for these substantial premium increases, the implications for consumer healthcare affordability and access remain a critical concern for both state officials and residents. The ongoing developments highlight the complexities of the healthcare system and the challenges faced by both insurers and policyholders in an increasingly challenging economic landscape.