CRANSTON, R.I.—A 20.1% rate increase request for large-group business in Rhode Island submitted by UnitedHealthcare of New England was cut to 10% when the state’s health insurance commissioner decided the insurer set aside too much for administrative costs and projected higher medical inflation than other insurers in the state.

Commissioner Christopher F. Koller on Monday also trimmed a 10.5% rate hike request from Blue Cross & Blue Shield of Rhode Island for large groups to 9.6%, and let stand a 4.8% rate increase requested by Tufts Health Plan.

The rate review is an annual process that usually takes place in May and June. It was delayed several weeks this year because of extensive revisions involved in reviewing UnitedHealthcare’s request, according to a statement from the Office of Health Insurance Commissioner.

Changes needed

“Health insurance is expensive because medical care is expensive. Medical care is expensive…because of the prices we pay and the number of services we use. More affordable rates of increase will not occur until we change the way our medical care is organized and delivered,” Commissioner Koller said in the statement.

He noted that the cost of medical care has risen 9% in Rhode Island over the past year, resulting in premium increases ranging from 4.8% to 10.6% for small and large fully insured groups.

In addition to its 20.1% increase for large groups, UnitedHealthcare had requested an 18% increase for groups of 50 or fewer employees, which the commissioner also reduced to 10%.

Blue Cross & Blue Shield of Rhode Island had requested a 10.5% increase for small- and large-size group health plans, but the commissioner approved only an 8% increase for small groups and a 9.6% increase for large, saying that its original filing also set aside too much money for administrative costs.

Healthier population

Commissioner Koller attributed Tufts’ lower rate hike request to the insurer’s ability to attract a healthier group of enrollees. Tufts requested a 4.8% increase in premiums for large- and small-size group plans, both of which were approved.

All three insurers accepted the commissioner’s rate hike revisions.

A complete table of the recommended rate hikes is available at www.ohic.ri.gov.