Smart Benefits: RI’s Healthcare Rate Increases for 2013
Monday, October 01, 2012
Small employers can expect an average rate increase of 1.65% from BCBSRI, 2.54% from UnitedHealthcare, and 5.30% from Tufts Health Plan.
Large employers can expect 3.98% from BCBSRI, 4.5% from Tufts Health Plan and 5.53% from UnitedHealthcare.
These rate increases are just averages. Factors like employer demographic changes, whether medical claims experience is used to underwrite the group, and product and plan design will influence an employer’s specific rates.
Increases as Expected
Kohler was stringent with his initial directive that carriers submit increases no higher than 4%, citing strong and vocal feedback from Rhode Island employers who sought relief from unsustainable health insurance costs. His decision last week confirms that he’s continuing the pressure on insurers to better manage medical expenses and administrative costs – and keep profits in check.
Insurers Need to Take Responsibility
Medical expenses are a big contributor to premium costs – and inpatient hospital care is a key driver in this state. It’s up to the insurers to keep expenses in check with the hospital systems. That means new provider payment arrangements that seek to improve patient outcomes, control system costs and reward for system improvement. While carrier-hospital negotiations over these issues can be strained, the bottom line is that if providers want to be paid certain rates, they’ll need to demonstrate performance to support them.
With carriers reducing their profits and administrative expenses – or at least holding them flat – the only place to continue to impact costs is where they’re rising the most. Let’s hope the hospitals respond to the challenge so that Rhode Island’s low premium increases this year aren’t the last.
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