Kilmartin Opposes Blue Cross Rate Increases
Friday, January 21, 2011
Attorney General Peter Kilmartin today announced his formal opposition to a proposed 8.1 percent increase in the rate for Direct Pay plans with Blue Cross Blue Shield.
Direct Pay plans are for individuals who buy their own health insurance, instead of getting it through their job.
Kilmartin’s office said its own calculations showed that only an increase of .4 percent can be justified. The office has also filed notice of its opposition with the Office of Health Insurance Commissioner at a public hearing, which was scheduled for today.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST“Unfettered increases in health insurance rates are putting more and more people at risk of losing coverage, particularly those who pay for 100 percent of their health insurance. Blue Cross should be more cognizant of the financial burden their proposed rate hikes have on struggling Rhode Islanders,” Kilmartin said.
He said Blue Cross needs to follow the example of other businesses and “tighten its own belt” before imposing rate increases on others. “Just as many businesses and individuals have had to do over the past few years, I believe Blue Cross can find cost savings across the organization that can and should be re-invested in the ratepayer to limit any rate increases,” Kilmartin said.
The Attorney General’s office released the following findings:
■ Blue Cross has arbitrarily selected trend factors for its projection of health care costs that are higher than the facts would warrant, resulting in a rate increase for Direct Pay subscribers that is excessive.
■ Blue Cross is charging excessive administrative costs to Direct Pay subscribers in its filing by not crediting subscribers with certain cost savings it has observed
■ Blue Cross’s proposed rates include an inappropriate charge for contribution to reserves from Direct Pay subscribers.
■ Blue Cross’s proposed rates include an inappropriate charge for state assessments and premium taxes. Last Year, the Commissioner determined that these costs should not be allocated to Direct Pay subscribers until it develops a more accurate method of allocating these costs to this group of subscribers.
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