Smart Benefits: More Rate Hikes For 2014
Monday, July 22, 2013
Large Rhode Island employers and employees who were expecting a financial break thanks to healthcare reform would instead face continued increases in health insurance premiums for 2014. In fact, employers should count on a low double-digit increase for next year.
Health Insurance Commissioner’s Approves Rate Increases
Rhode Island's Health Insurance Commissioner's last order of business before exiting the state last month was to approve the following final rate increases for the state's three commercial insurers.
- BCBSRI: 12 percent base increase
- Tufts Health Plan: 9.55 percent increase
- UnitedHealthcare of New England: 9.70 percent increase
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Remember that these premium increases are base increases and can vary widely by employer because of variances in demographics and claims.
Reform Costs to Blame Despite Mandate Delay
All three insurers had requested even higher increases of 17.10, 10 and 13 percent respectively, citing the risk and uncertainty of healthcare reform as well as new fees and taxes associated with the new laws.
BCBSRI and United Healthcare both stated in their rate filings that healthcare reform would add another 4.5 to 4.8 percent to costs. And while the employer mandate has since been put on hold, many other provisions are still being rolled out and the federal government has left the costs associated with healthcare reform in place.
It’s Time to Get Creative
Last year, the Health Insurance Commissioner approved low-to-mid single digit increases for all three carriers. Faced with increases even higher than what they witnessed in 2013, employers should consider more cost-sharing and plan design changes to minimize the impact of the Commissioner’s final action.
Amy Gallagher has over 19 years of healthcare industry experience. As Vice President at Cornerstone Group, she advises large employers on long-term cost-containment strategies, consumer-driven solutions and results-driven wellness programs. Amy speaks regularly on a variety of healthcare-related topics, is a member of local organizations like the Rhode Island Business Group on Health, HRM-RI, SHRM, WELCOA, and the Rhode Island Business Healthcare Advisory Council, and participates in the Lieutenant Governor’s Health Benefits Exchange work group of the Health Care Reform Commission.
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