Attorney General Peter F. Neronha announced today the filing of objections with the Office of Health Insurance Commissioner (OHIC) in response to requests to increase health insurance rates in 2024 filed by multiple health insurers. Altogether, these requests would impact more than 166,000 Rhode Islanders enrolled in individual, and large and small employer group insurance plans.
The Attorney General filed objections to insurers’ proposed rate increases pursuant to his statutory authority to protect and advocate for Rhode Islanders, including when health insurance rate increases are requested. The goal of the Attorney General’s objections is to protect Rhode Islanders from paying more than their fair share for health insurance, by considering not only the numbers but also the real economic situation facing the state and the nation. Attorney General Neronha urged OHIC to reject any and all rate increases for the six carriers given the increasingly difficult financial situation for Rhode Islanders.
“Once again, this Office is objecting to proposed health insurance rate increases that would impact more than 166,000 Rhode Islanders because we believe they are not justified given current economic conditions and the relative financial strength of the health insurers,” said Attorney General Neronha. “Rhode Islanders should not bear the full weight of rising healthcare costs alone. It should be a shared responsibility borne by all stakeholders including health insurance companies. Indeed, among all the players, they are by and large the strongest financially. By preventing health insurers from passing increased costs through to consumers, we create an incentive for stakeholders to work together to improve our health care system and strengthen it.”
The six insurers reviewed were: Cigna, United Healthcare, Aetna, Blue Cross Blue Shield, and Harvard Pilgrim in the large group market; Blue Cross Blue Shield, Neighborhood Health, Harvard Pilgrim, and UnitedHealth in the small group market; and Neighborhood Health and Blue Cross Blue Shield in the individual market.
The Attorney General’s objections noted that the requests for rate increases are being made during a period of economic struggles of many Rhode Islanders, following recent increased levels of inflation affecting the costs of critical goods, as well as historically high housing prices in Rhode Island.
In this year’s analysis, the Office focused on the carriers themselves, and the public comments highlight the enormous profits – in some cases billions of dollars – made by many of these companies in recent years. For example, Cigna, which requested an increase of 5.9% in the large group market, reported total adjusted revenue of $180.5 billion in 2022 and is projecting a total adjusted revenue of $187 billion in 2023. Further, Aetna, which requested a 6.6% rate increase in the large group market, brought in $91.4 billion in revenue in 2022 and contributed to parent company CVS Caremark’s year of outperformance in which it reported more than $300 billion in total revenue.
In his comments, the Attorney General stressed that the insurers’ increased financial resources should be passed on to benefit consumers by making coverage more affordable.
The Office also scrutinized the actuarial basis for the insurers’ rate-increase requests and, working with a team of independent actuaries, found those requests to be inflated. For example, the independent actuaries applied accepted industry standards and found that several of the insurers’ projected trends were not supported by the historical data. So even on an actuarial basis, the numbers show that the rates requested by the insurers were higher than justified and smaller increases would be more reasonable for all markets analyzed.
For these reasons, as detailed in the Attorney General’s objections, should the Health Insurance Commissioner determine that any increases are warranted, the Attorney General recommends, based on actuarial findings, increases be limited to much lower rates, and no more than what is adequate for insurers to provide services but still affordable for residents.
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