Continuing its ongoing efforts to help moderate the cost of healthcare and health insurance premiums, Blue Cross & Blue Shield of Rhode Island (BCBSRI) filed with the Office of the Health Insurance Commissioner (OHIC) rate factors that, if approved, will result in an average premium increase before federal taxes of 2.1 percent for small groups and 4.2 percent for large groups. Both rates include medical trend factors that are below the OHIC’s recommended target.
With guidance from OHIC, the local, nonprofit health insurer issued two filings that include additional factors for new taxes and assessments as mandated under the Patient Protection and Affordable Care Act, which will be at least 1.7 percent but could be as much as 4.3 percent. The filings also reflect medical trends of 3.0 percent for small groups and 2.9 percent for large groups—both below the 4.0 target established by the OHIC.
“We understand that our customers and members continue to struggle during these difficult economic times, and many will not be happy with any request for a rate increase,” said Peter Andruszkiewicz, BCBSRI president and CEO. “Others, however, will recognize that BCBSRI’s efforts to reduce medical expenses over the last several years, along with administrative expense reductions, are demonstrating real results for our customers.”
Andruszkiewicz explained that BCBSRI’ s efforts—including a new pharmacy benefit manager contract with SXC Health Solutions, due to begin on January 1, 2013—allowed BCBSRI to apply a one-time credit to the rates. In addition, new agreements with physicians and hospitals, which are based on incenting quality performance as opposed to volume of services, have allowed BCBSRI to file medical trend factors of less than the recommended 4.0 percent.
Andruszkiewicz concluded, “Moving forward, BCBSRI will continue to work hard with the entire healthcare community to realize system-wide change that transforms our healthcare system into a model for coordinated care. This will help provide a positive patient experience with better outcomes and lower costs for all Rhode Islanders. We will also need to continue our focus on administrative cost reduction.”