Blue Cross & Blue Shield of Rhode Island (BCBSRI) today notified the Office of the Health Insurance Commissioner (OHIC) that it will not withdraw its recent rate filing, stating that the company stands to lose approximately $125 million if the OHIC does not approve its rate filing requests in the small and large employer group markets.
"We understand that many of our members are suffering in the current economic conditions, but the fact is that rising medical costs and increased utilization of services are climbing faster than our rates," said James E. Purcell, president and CEO. "Quite frankly, the OHIC is putting the state's oldest nonprofit health insurer at financial risk by denying our filing. We simply cannot afford to lose $125 million."
Purcell went on to add that prior to the rate increase request, the company took numerous steps to reduce its operating expenses, including eliminating 79 positions, renegotiating several large vendor contracts, freezing employee salaries, reducing reliance on outside professional services, and eliminating non-essential programs and services. Even the company's much contested new headquarters is expected to save $25 million over the long-term.
"Unfortunately, it is not administrative expenses, but medical costs that are the primary drivers of rate increases and which necessitate our rate filing at this time," concluded Purcell.
Blue Cross & Blue Shield of Rhode Island is the state's leading health insurer and now covers more than 600,000 members. Blue Cross & Blue Shield of Rhode Island is an independent licensee of the Blue Cross and Blue Shield Association.