SOUTH KINGSTOWN – Rhode Islanders pay among the highest commercial health insurance premiums in the nation, according to a report from the Rhode Island Business Group on Health.
The report found that the cost of commercial health insurance premiums rose from 23% of median household income in 2012 to 28% in 2022. During this same time period, the amount Rhode Island families paid for commercial health insurance premiums rose from the 14th most expensive in the country to the 13th.
RIBGH identified the three largest expenses covered by commercial health insurers as: state taxes, fees and assessments; commercial health insurers’ own operating costs; and medical care that all premiums cover, including all costs for hospital care, specialty physicians and prescription drugs. Hospitals accounted for by far the largest medical expense covered by commercial health insurance premiums, representing an average of 50% of the expenses between 2012 and 2022.
“The unsustainable trend of higher commercial health insurance premiums will continue unless all parties paying for and delivering health care take decisive action now,” said Al Charbonneau, RIBGH executive director. “Failing to act means Rhode Island employers and working families will continue reeling from unrestrained commercial health insurance premiums.”
Charbonneau said lowering health care costs begins by identifying the major cost drivers affecting commercial premiums as done in RIBGH's report. He suggested implementing payment reforms as a way to reduce the effects of these cost drivers. Charbonneau said most health policy researchers have found fee-for-service payments is one of the biggest barriers to improving affordability. To address this, he suggested Rhode Island pursue the opportunity to participate in the Centers for Medicare & Medicaid Services All-Payer Health Equity Approaches and Development or AHEAD program. CMS announced the program in September 2023 with the purpose of testing participating state's accountability in controlling overall health expenditures growth while also increasing investments in primary care, boosting population health and health equity, according to CMS' website.
In terms of policy, Charbonneau suggested the General Assembly declare a moratorium on all kinds of mandated benefits and create a model similar to the analysis performed on proposed changes to worker's compensation benefits so policy makers may better understand how changes to benefits affect commercial premiums.
Katie Castellani is a PBN staff writer. You may contact her at Castellani@PBN.com.
