Commercial health insurance rate hike requests draw opposition from AG

Rhode Island Attorney General Peter Neronha is urging the Rhode Island Office of Health Insurance Commissioner (OHIC) to reject all commercial health insurance rate increases requested by six carriers for 2024.

Requested average rate increases had wide ranges from the individual market (4.4% to 9.3%); small group market (5.8% to 16.1%); and large group market (5.9% to 12.4%). The rate increases would impact 166,000 Rhode Islanders enrolled in individual, and large and small employer group insurance plans. 

Neronha said the requested rate increases come during a time of economic challenges for many Rhode Islanders with inflation increasing the cost of necessities and historically high housing prices in Rhode Island. Economic performance indicators show the state experienced a decrease in jobs in the second quarter of this year compared to the same period in 2022.

OHIC is charged with reviewing pricing assumptions, administrative charges, and other information to evaluate each insurer’s premium requests. The commission published the requested rates on June 16 and solicited public comment as part of the review process.

Neronha’s office has the statutory authority to conduct an independent review of the rate increases to make recommendations to OHIC when health insurance rate increases are requested.

“We have reviewed the RIAG’s letters and actuarial reports and have requested some additional data and documentation from the RIAG’s consulting actuaries,” said Acting Commissioner Cory King in an email. “We are finishing up our review and should have this wrapped up by the end of the month.”

King said OHIC received one email during the public comment period, which along with comment letters and actuarial memos submitted by the Attorney General’s Office, will also be posted on the OHIC website. 

The six insurers reviewed were: Cigna, United Healthcare, Aetna, Blue Cross Blue Shield, and Harvard Pilgrim in the large group market; Blue Cross Blue Shield, Neighborhood Health, Harvard Pilgrim, and UnitedHealth in the small group market; and Neighborhood Health and Blue Cross Blue Shield in the individual market.

Analysis by Neronha’s office focused on the profits – in some cases billions of dollars – made by many health insurers in recent years, citing Cigna’s request for a 5.9% increase in the large group market, even as the company reported total adjusted revenue of $180.5 billion in 2022. Cigna is projecting a total adjusted revenue of $187 billion in 2023. 

Aetna, which requested a 6.6% rate increase in the large group market, brought in $91.4 billion in revenue in 2022 and contributed to parent company CVS Caremark’s year of outperformance in which it reported more than $300 billion in total revenue.

The increasing financial resources of health insurers should be passed on to benefit consumers by making coverage more affordable, Neronha said in comments submitted to OHIC. 

“Rhode Islanders should not bear the full weight of rising health care costs alone,” Neronha said. “It should be a shared responsibility borne by all stakeholders including health insurance companies. Indeed, among all the players, they are by and large the strongest financially. By preventing health insurers from passing increased costs through to consumers, we create an incentive for stakeholders to work together to improve our health care system and strengthen it.”