2018 Premium Increases Linked to Healthcare Utilization and Taxes

Blue Cross & Blue Shield of Rhode Island (BCBSRI) recently filed with the Office of the Health Insurance Commissioner (OHIC) premium rates to cover the projected cost of healthcare, fees, and administration in 2018 for fully insured groups.

BCBSRI has filed a request for an average increase in premiums of 8.6% for small group customers, which includes approximately 1.5% in federal health insurer taxes. Large group rate factors were filed with the OHIC in May at 11.9%. Actual rates our customers experience are always dependent on a variety of factors, including employee demographics and plan selection. Final premium rates for 2018 are subject to OHIC’s review process.

Cost of Healthcare Services Grows

Despite successful collaborations with leading healthcare providers across our state to better coordinate patient care and to shift to value-based contracting arrangements, the utilization and cost of member healthcare and prescription drugs across Rhode Island continues to outpace the advances being made.

Illustrative of the utilization and cost trends reflected in BCBSRI’s filing, the following table depicts areas where Rhode Island’s overall demand for healthcare services is higher than regional and national averages.

SOURCE: Blue Health Intelligence

BCBSRI remains committed to working with our primary and specialty healthcare providers to improve patient experience and ensure services are delivered in the right setting at the right time through coordinated care models and value-based contracting incentives.

Federal Requirements Impact Rates for Families

Another significant contributor to the projected 2018 increases in insurance premiums is the federally required health insurer tax, which was suspended for the 2017 rate year but has been reinstated for 2018.

Beyond the health insurer tax, the Affordable Care Act (ACA) also requires changes in how premium rates are established for children up to age 21. The new requirement seeks to “smooth out” the existing age slope with incremental premium increases applied each year of age versus a single rate change at age 21. 

The following illustrative example outlines how the new rating rule may impact member rates 21 and under. 

New Options to Better Manage Costs

Through our BlueCHiP family of coordinated care health plans, groups and employees can better manage premium and out-of-pocket costs by obtaining care from a network of high-quality, trusted doctors and hospitals. In 2018, our newly introduced New England Health Plan extends the benefits of a PCP-guided care experience to employees across five New England states.

For employers who want to provide their employees with more control over their healthcare experience and costs, our BlueSolutions consumer-driven healthcare plan offers lower premiums, comprehensive coverage, and the tax advantages of a qualified health savings account (HSA).

Speak to your BCBSRI representative today about available options for your clients in 2018.