The rate requests, which are on average over 20% in every market, are the highest in over a decade.

The proposed rate hikes will affect more than 170,000 Rhode Islanders who are covered under individual, small and large group plans.

The Office of the Health Insurance Commissioner will hold a virtual town hall on July 24 where people will be able to submit public comments.

PROVIDENCE – Rhode Island private health insurers have submitted rate requests to the Office of the Health Insurance Commissioner (OHIC), asking for the steepest premium increases in more than a decade.

The requested rate increases, which are for coverage effective on or after Jan. 1, 2026, range, on average, from 23.7% in the individual market to 22% in the small group market and more than 24% in the large group market. In comparison, last year’s requests ranged from 8.8% to 15.4% and 13.6% in those same markets, respectively.

The proposed rate hikes will affect more than 170,000 Rhode Islanders who are covered under individual, small and large group plans. People covered by self-funded employer groups, which account for about 65% of Rhode Islanders with employer-sponsored coverage, are not included.

OHIC’s decision on the rate increases is expected by September. OHIC will hold a virtual town hall on Thursday, July 24, at 4:30 p.m. where people will be able to submit public comments.

What did insurers ask for?

OHIC conducts an annual rate review process, where insurers submit requests for raising their premiums. OHIC reviews these requests and either approves, modifies or rejects them. Last year OHIC approved rates lower than those requested by insurers, which saved consumers money but prompted criticism from some insurers.

The rate review process is tricky, in that it must strike a balance between “affordability for the consumer, the funding needs of health care providers and the solvency of health insurers,” explained Health Insurance Commissioner Cory King.

“The process is about ensuring that premiums are not excessive for consumers or inadequate for providers and insurer statutory reserves,” King added.

This year, health insurers Blue Cross Blue Shield of Rhode Island (BCBSRI), Neighborhood Health Plan of Rhode Island (NHPRI), UnitedHealthcare, Harvard Pilgrim Health Care of New England Inc. (HPHC), HPHC Insurance Company (HPIC), Aetna, and Cigna submitted rate increase requests in the following markets:

Individual market

Insurer Rate Request BCBSRI 28.9% NHPRI 21.2% Average 23.7% Total enrollment 54,339

Small group market

Insurer Rate Request BCBSRI 22.2% NHPRI 20.3% UHCNE 21.2% UHIC 20.3% Average 22% Total enrollment 42,865

Large group market

Insurer Rate Request BCBSRI 24.3% UnitedHealthcare 23.8% HPIC/HPHC 26.4% Aetna 13.5% Cigna 16.8% Average 24.1% Total enrollment 77,654

Why are insurers requesting steep rate increases?

Rate increases are based on several factors, such as services, hospital stays and medications.

“Fundamentally, Rhode Islanders’ premiums are priced based on the cost of covered health care goods and services, including hospital stays, physician services, and prescription drugs. When these costs rise, premiums rise accordingly,“ King said.

Some of it is simply the growing cost of providing care in the United States. There has also been a spike in utilization of weight loss drugs, such as Ozempic, which was one of the drivers of health care expenditure in the state in OHIC’s most recent report. And there are changes at the federal level, such as the impact of tariffs on imported drugs and ingredients for drug production.

One unique driver is the upcoming expiration of Enhanced Premium Tax Credits, which lower premiums bought through HealthSource RI, the state’s insurance marketplace. These are set to sunset this year, unless extended by Congress. The expiration of these credits added nearly 10% to BCBSRI’s and nearly 5% to NHPRI’s requested rates in the individual market plans, according to OHIC.

BCBSRI, the largest private health insurer in Rhode Island, has also experienced an increase in health care spending of about 20% in the last two years. This is due to an increase in services, rising costs and higher utilization of expensive drugs, according to a statement provided by Richard Salit, a spokesperson for BCBSRI.

“These costs have grown faster than premiums and contributed to BCBSRI posting an unprecedented net loss of $115 million for 2024, while reserves necessary to ensure the ability to pay claims during financially challenging times have diminished,” the statement said.

The insurer laid off 3% of its staff in March to lower operating costs.

Another reason behind BCBSRI’s rate increases is the insurer’s recent announcement to raise payments to primary care providers, following the implementation of a new rule by OHIC.

“BCBSRI’s requested 2026 rates reflect the true cost of healthcare, include higher payments for PCPs, respond to changes in federal policy, and provide for some replenishment of reserves,” the statement said.

Attorney general’s office will not do actuarial analyses

In rate reviews over the last three years, the attorney general’s office has conducted independent actuarial analyses of the rate filings and submitted its own recommendations to OHIC, at times strongly opposing the rate hikes requested by insurers. But this year the attorney general’s office said it won’t do so, according to OHIC.

King, however, reckons that actual analyses – through which insurer data is indeed entry evaluated and statistical projections are drawn – are a “core feature” of the rate review.

“Consumers benefit from regulators getting this right, because the risks of getting it wrong are real,” King said. “These risks include employers and consumers facing excessive charges for premiums, or providers being stiffed appropriate resources, or insurer statutory reserves being depleted to hazardously low levels.”

Are rate increases the new normal?

Though recent health insurance rate requests have been high, King said they are more a product of the volatility of the rising costs of health care than a sign of a new normal.

“Currently there is little evidence to suggest that the requested rate increases harbinger a new normal. Health care spending growth, which is the key driver of premiums, has been volatile over the last four years,” King said. “To some extent, this volatility has made it difficult for insurers to price their premiums, which has contributed to operating losses and depleted reserves for some insurers.”