U.S. Markets open in 2 hrs 23 mins

RI health insurance commissioner OKs premium hikes

Erika Niedowski, Associated Press

PROVIDENCE, R.I. (AP) -- Many Rhode Islanders will pay more for health coverage next year under new higher premiums approved by the state health insurance commissioner, though insurers had sought even steeper hikes.

Christopher F. Koller last week approved rates for the more than 200 plans that will be on the market in Rhode Island in 2014. He has since stepped down, as planned; former Miriam Hospital CEO Kathleen Hittner was confirmed Tuesday as the new health insurance chief.

In the large employer market, Koller approved an average rate increase of 12 percent for Blue Cross & Blue Shield of Rhode Island, the state's dominant insurer. It had requested an increase of 17 percent, including higher spending on administrative costs.

Koller approved a near 10 percent increase for UnitedHealthcare of New England, which had sought a 13 percent increase. Tufts Health Plan had requested a 10 percent increase; the approved hike is slightly less than that.

For individuals and small employers, base rates will range from $312 to $371 a month. Insurers had sought rates that were 2 percent to 10 percent higher. The base rate is the monthly average for a standard plan for a 21-year-old, so many people will end up paying a different amount.

The federal health care overhaul changed the way states review individual and small employer premiums, making it difficult to compare 2014 plan costs to this year's.

Blue Cross is being joined in the individual market by Neighborhood Health Plan of Rhode Island, which currently serves only those with Medicaid and will be offering plans for commercial sale for the first time. Blue Cross, United, Tufts and Neighborhood are all offering small employer plans next year.

Overall, the health insurance commissioner's office said the increases are being driven primarily by rising medical expenses, along with administrative costs, contributions to reserves and one-time costs associated with the Affordable Care Act, which takes full effect next year. The law requires most individuals to have insurance beginning Jan. 1, provides subsidies to help pay for it and penalizes those who don't get it.

In Rhode Island, individuals and small businesses will be able to compare and buy coverage from an online marketplace called an exchange. The exchange is currently working to finalize which plans will be available. Enrollment begins in October.

Koller said in a statement that, as Rhode Island continues to implement the health care overhaul, it "cannot be distracted from the real task" of keeping medical expense increases in check. He added: "This is hard work that will require private and public sector leadership."

Blue Cross said it accepted the rates set by Koller and that it is working to lower costs.

"We understand that Rhode Islanders are struggling and cannot afford continuing significant rate increases," CEO Peter Andruszkiewicz said in a statement. "We remain committed to working with all stakeholders to address issues of cost."

UnitedHealthcare and Tufts said they too were trying to keep health care costs down.