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By Richard Asinof
By Richard Asinof
PROVIDENCE – In one of his last official acts, outgoing R.I. Health Insurance Commissioner Christopher F. Koller announced his decision today to significantly lower premiums for commercial health insurers’ 2014 monthly rate plans for the individual, small group and large group markets.
The decision also marks the next step in the implementation of health care reform in Rhode Island and health insurance plans to be sold on the R.I. Health Benefits Exchange.
The four commercial health insurers selling products in the Rhode Island market beginning the first of the year include Blue Cross Blue Shield of Rhode Island, Neighborhood Health Plan of Rhode Island, Tufts Health Plan and UnitedHealthcare.
Koller also reviewed each health insurer’s contracts to ensure plans sold in Rhode Island meet benefit, access and member cost-sharing standards required by the state and by the Affordable Care Act.
Specific details about the plans to be offered on the exchange for individuals and small groups will be made available once such plans are approved by federal regulators, according to Christine Ferguson, executive director of the exchange. The expected date for approval is July 15.
In analyzing rates in the individual and small business markets, figures used reflect how much a 21-year-old would pay per month for an Essential Health Benefit Rate, according to Koller. Final rates will differ based on a subscriber’s age and the benefits he or she chooses.
For example, for the individual market, Blue Cross requested rate of $330.97 was reduced to $313.85 per month, and Neighborhood Health Plan’s requested rate of $344.68 was reduced to $311.68 per month.
For the small group market for employees with less than 50 employees, Blue Cross’s requested rate was reduced form $355.97 to $347.58 per month, Neighborhood Health Plans’ requested rate was reduced from $327.74 to $324.58, Tufts requested rate for its PPO plan was reduced from $377.72 to $371.41, Tufts requested rate for its HMO plan was reduced from $375.38 to $344.44, and United’s requested rate for its PPO was reduced from $368.03 to $348.31. All premium figures were per month.
For the large group market, Blue Cross’s requested rate increase was reduced from 17 percent to 12 percent, Tufts requested rate increase was reduced from 10 percent to 9.55 percent, and United’s requested rate increase was reduced from 13 percent to 9.7 percent.
The rising cost of medical care – the prices insurers pay to providers for particular services and the number of services members use – continues to be the main driver of health insurance premium growth, according to Koller.
OHIC approved medical expense trends from 5.8 percent to 7.6 percent across the markets. “Frankly, the 5 to 7 percent increase in medical [expense] trends sucks,” Koller said, speaking with candor to members of the R.I. Healthcare Reform Commission at its meeting on June 27.
In the release with the decision, Koller said the new rates also reflect one-time changes due to the implementation of the Affordable Care Act.
“While the work of implementing the ACA continues, Rhode Island cannot be distracted from the real task of reducing the rate of medical expense trend growth in our state,” Koller said in a statement. “This will only come with efforts to promote more integrated delivery systems that can better coordinate care, different ways of paying providers and more engaged consumers.
“This is hard work that will require private and public sector leadership. We are taking important first steps with our work on primary care, health information technology and payment reform, but much more needs to be done,” he added.