PROVIDENCE – R.I. Health Insurance Commissioner Christopher F. Koller, himself in the crosshairs as House Democrats move to eliminate his office, has escalated a battle over health insurance premium hikes sought by the state’s leading insurers.
In May, Blue Cross & Blue Shield of Rhode Island, United Healthcare of New England and Tufts Health Plan filed paperwork with the commissioner’s office requesting state approval to enact large increases in health insurance premium rates later this year.
Blue Cross, the state’s dominant insurer, said it planned an average rate increase of 16.3 percent for large group insurance plans and 13.9 percent for small groups, according to estimates by the commissioner’s office.
United requested approval for an average rate increase of 11.6 percent for large group insurance plans and 13.2 percent for small groups, the office said. An estimate for Tufts was not available. Full details are contained in a document on the commissioner’s Web site.
The insurers said the higher premium rates are necessary to keep up with rising administrative and medical costs. But the proposed increases drew immediate fire from small business owners and a number of politicians, including Lt. Gov. Elizabeth H. Roberts and Attorney General Patrick C. Lynch.
On Thursday, Koller sent letters to all three insurers demanding that they withdraw the rate increase requests, calling them “simply not acceptable” in light of the state and national economic situation.
“Rhode Island employers and employees have reached a tipping point with respect to their ability to pay for health insurance,” Koller wrote. “We are in a crisis and our health care system simply cannot go forward as we have in the past.”
But Blue Cross quickly issued a statement saying it stood by its requested increase. “The vast majority of our request is a result of increases in claims expense,” Rick Farias, Blue Cross’s chief operating officer, said in a statement. “Additionally, the request is based on the fact that previous requests were denied or reduced by [the commissioner’s office]. Simply put, the costs of health care are outpacing the rate of increase in premiums.”
A spokeswoman for United Healthcare, Debora Spano, said: “We only got the letter yesterday, and the team is looking at it to see what our various options are. We have not yet made a decision on our next step.”
Koller said the insurers’ failure to withdraw the rate increases would result in formal rate hearings – quasi-judicial proceedings like those the R.I. Public Utilities Commission holds for National Grid, Cox Communications and other utilities – beginning by July 14. Lynch said his office would send representatives to testify at any hearings.
Even as Koller prepares to scrutinize the health insurers’ requests, he faces the prospect of his office ceasing to exist within weeks. The state budget for 2009-2010 approved by the House Finance Committee on Wednesday would eliminate the Office of the Health Insurance Commissioner and distribute his duties to other departments to save $700,000.
The office was created by the General Assembly in 2004. One of the co-sponsors of the bill that created it was none other than House Finance Committee chair Steven M. Costantino, D-Providence, who drafted the budget that would kill the office.
In a statement, Roberts said she planned to press legislative leaders not to eliminate Koller’s position on July 1, when the new fiscal year begins.
“Without the Office of Health Insurance Commissioner, Rhode Islanders would have been left in the dark about the proposed health insurance rate hikes that were rejected today,” the lieutenant governor said. “Rather, we would be facing yet another double-digit health insurance rate hike.”
Rick Brooks, director of the United Nurses & Allied Professionals union and co-chair of the commissioner’s advisory council, also called on state leaders to restore funding for the office. In an e-mail, Brooks said he had “observed and appreciated the critical role that [the commissioner’s office] has played in protecting the interests of consumers and providers when faced with insurance company rate increase proposals.”
He added that the office’s elimination “would leave the state of Rhode Island with absolutely no legal authority to block health insurance company rate increases on the basis of their affordability.”
Asked if Blue Cross & Blue Shield of Rhode Island had any comment on the proposal to eliminate the commissioner’s office, spokesman Christopher J. Medici said: “We’re going to respectfully decline to comment.” United Healthcare’s Spano also declined to comment on the matter.
An earlier version of this article contained a photo caption that incorrectly said Blue Cross & Blue Shield of Rhode Island had refused to withdraw its rate increase request. In fact, Blue Cross has only said that it stands by the request and will review its options over the next few days.
Additional information on the R.I. Office of the Health Insurance Commissioner is available at RI.gov.
