HEALTH INSURANCE

OHIC releases analysis of market, enrollment trends for R.I. insurers

PBN FILE PHOTO/RUPERT WHITELEY
CHRISTOPHER F. KOLLER, R.I. Health Insurance Commissioner, released two reports today, which provide insight into market and enrollment trends of Blue Cross Blue Shield of Rhode Island, UnitedHealthcare and Tufts Health Plan.
Posted 12/18/12

PROVIDENCE – Two reports released today by R.I. Health Insurance Commissioner Christopher F. Koller provide insight into market trends covering Rhode Island’s commercial health insurers.

The first report benchmarked Rhode Island’s two largest health insurers - Blue Cross & Blue Shield of Rhode Island and UnitedHealthcare of New England - “domiciled” in the state. The report looked at the metrics for administrative spending, medical trends and surplus and compared them to other New England states, using data from 2007 through 2011.

It was conducted by the Wakely Consulting Group and had been submitted six months earlier, on July 19. No specific reason was given by OHIC why the report was being released now, but it follows Blue Cross’s recent request on Dec. 7 for an increase in its 2013 rates, based on increases in utilization trends in 2012.

Blue Cross is seeking a 9.1 percent average rate increase for large group employers, 5.12 percentage points higher than the 3.98 percent increase granted by Koller in September, and a 5.1 percent average rate increases for small group employers, 3.45 percentage points higher than the 1.65 average percent rate increase approved by Koller in September.

The Wakely report had been used as key part of the basis decision-making on premium rate increases requested by the insurers in 2012, according to OHIC.

Among the findings highlighted by OHIC in the Wakely report were:

  • UnitedHealthcare of New England had one of the highest profit margins in comparison to other states in the region, while Blue Cross had one of the lowest.

  • Both Blue Cross and UnitedHealthcare, in general, spend less of their premium dollars on medical claims, and more on administrative costs, relative to regional states.

  • Medical spending trends in Rhode Island were about average compared to the region for most major categories. However, Rhode Island insurers did report higher than average spending trends for physician services and prescription drugs.

To view the entire report, visit www.ohic.ri.gov.

The second report looked at enrollment trends through June 2012 of the three commercial insurers in Rhode Island – Blue Cross, UnitedHealthcare and Tufts Health Plan, reflecting membership patterns across markets, companies, and employer size.

The key trends identified by OHIC included:

  • The size of the commercial market fell by 2,896 covered lives (members) from December 2011. Since December 2005, the commercial market has lost 63,274 covered lives and now represents 559,719 members.

  • The loss was concentrated in the fully insured market, which fell by 5,197 lives versus a gain of 2,301 members in the self-insured market. In particular, UnitedHealthcare lost more than 10 percent of its fully insured membership between December and June.

  • The self-insured market is now larger than the large-group market by nearly 10,000 members. This pattern reflects a broader trend of large employers choosing to assume the risk of paying for their employees' health claims.

To view the second report, visit: www.ohic.ri.gov.

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