Rhode Island's health insurers are asking for the highest premium increases in more than a decade, saying the rate hikes are necessary to cover rising expenses, but observers are warning that the situation is becoming unsustainable.
The R.I. Office of the Health Insurance Commissioner recently released insurers’ proposals for 2026 premiums, which in some cases are almost quadruple the percentage increases approved for 2025. OHIC is tasked with reviewing the proposed rates annually and deciding whether to approve, reject or modify each one.
For the past three years, Attorney General Peter F. Neronha – who is mandated to advocate on behalf of consumers in these matters – has hired analysts to review the filings and send recommendations to OHIC, but not this year.
Noronha spokesperson Tim Rondeau said years of experience in participating in the process have shown that the independent analyses have offered “very little benefit to consumers.” Instead, the attorney general’s office will redirect those resources to health care initiatives to make “tangible impacts.”
Also, the attorney general has hired a “health care economist” to provide testimony on individual market rates.
Nevertheless, Neronha said he opposes the request rate increases, as he has in years past.
“We argued that given the state of health care in Rhode Island, particularly the lack of access to primary care, the product [health insurance plan] did not match the price consumers were being asked to pay,” Rondeau said. “That hasn’t changed this year.”
Others agree.
John Simmons, president of the Rhode Island Business Coalition, said the businesses that he has spoken with were disappointed by the proposed rate hikes and some are considering ending their employer-based plans or going to a self-insured model because of rising costs.
“It's now becoming a lot harder to stay with the health care system,” Simmons said.
Indeed, the proposals are “staggering and cannot be ignored” and raise concerns about the sustainability of employer-based insurance, said Al Charbonneau, executive director of the Rhode Island Business Group on Health.
Businesses' enrollment in commercial plans dropped almost 50% between 2012 and 2023, according to RIBGH’s analysis of large and small group subscriber data. This drop is driven by the costs of coverage as family premiums account for almost 28% of median household income, according to the National Medical Expenditure Panel Survey.
What is being proposed by the insurers for 2026? Requested average rate increases for the individual market range from 21.2% to 28.9%. Approved rate increases in 2025 averaged 7.8%.
In the small-group market, insurers requested rate increases ranging from 20.3% to 22% – well above the 12.4% rate increase approved in 2025. Large-group rate hike requests range from 13.5% to 26.4%; approved raises averaged 11.2% in 2025.
Several causes have been cited for the rising premium proposals, including higher payments to hospitals and providers, rising use of and claims for weight loss drugs, tariffs and other global and national economic pressures.
“Affordability challenges persist for consumers and employers. Medical and pharmaceutical costs continue to climb to unprecedented levels – higher than they have risen in decades,” said Kathleen Makela, a spokesperson for Point32Health, the parent of Harvard Pilgrim Health Care and Tufts Health Plan. “The rates filed for our product are a direct reflection of these unabating costs.”
Rich Salit, spokesperson for Blue Cross & Blue Shield of Rhode Island, said the insurer has seen a 20% increase in health care spending over the past two years because Rhode Islanders are receiving more services. Also, costs, including for expensive drugs, have risen faster than premiums and contributed to the insurer’s “unprecedented” $115 million loss reported in 2024.
Earlier this year, BCBSRI laid off 3% of its workforce to limit increases and lower operating expenses.
About one-fifth of BCBSRI’s requested premium increase stems from the insurer being required by OHIC to raise payments to primary care providers by 30%.
Also, one-third of the increase in the individual market comes from uncertainty over federal enhanced premium tax credits, which are set to expire in 2026, a shift that affects about 30,000 Rhode Islanders.
“BCBSRI’s requested 2026 rates reflect the true cost of health care, include higher payments for PCPs, respond to changes in federal policy, and provide for some replenishment of reserves,” Salit said.
Observers say it’s also crucial to reduce hospital costs to rein in insurance premiums.
Hospital costs account for almost 50% of all commercial medical claims, and outpatient hospital expenses have been rising faster than prescription drug costs, both in rate of increase and total dollars spent, according to RIBGH data. Hospital overhead represents almost 50% of total expenses, which is the second highest in the nation.
”We cannot achieve a sustainable health system without addressing hospital costs, especially those outside the inpatient setting, which continue to grow unchecked,” Charbonneau said. “If we can't get hospitals more aligned with affordability, then the idea of affordable health insurance is just a dream.”
He praised the General Assembly’s inclusion of the AHEAD program – All-Payer Health Equity Approaches and Development – in the state budget. The program is run by the U.S. Centers for Medicare & Medicaid Services with the purpose of testing participating state’s accountability in controlling health expenditures and increasing investments in primary care. Over the next six months, Rhode Island hospitals will evaluate the program and decide whether to participate.
Simmons also raised concerns about the potential effects of the several mandated health benefits recently approved by the General Assembly. Mandated benefits aren’t a bad idea, Simmons says, but he would like there to be more analysis of how they affect costs, as adding more benefits has increased health insurance premiums throughout the state.
Both Simmons and Charbonneau suggest greater collaboration among state officials, businesses and insurers to find cost-saving strategies.
“If we don’t do something different, we should expect the same results again next year—only worse,” Charbonneau said.
Unfortunately, almost all of this stress is caused by the pharmaceutical manufacturers of Wegovy and Miunjaro. Unfortunately, our all powerful, deal making king president allows them to charge exorbitant rates, even though one of the two companies isn’t even an American company, and the money is going out of the country.