New R.I. AG opposes rate increase

Keith Loria Jan. 24, 2011, 1:55pm


PROVIDENCE, R.I. (Legal Newsline) - Rhode Island Attorney General Peter Kilmartin announced on Friday that he believes a proposed rate increase by Blue Cross Blue Shield of Rhode Island should be denied.

Kilmartin presented his own rate calculations to the Office of Health Insurance Commissioner at a public hearing.

Blue Cross requested an overall 8.1 percent rate increase for its Direct Pay line of business. Kilmartin said that only an overall increase of 0.4 percent can be justified.

"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," Kilmartin said.

"Blue Cross should be more cognizant of the financial burden their proposed rate hikes have on struggling Rhode Islanders."

Kilmartin alleges that Blue Cross arbitrarily selected trend factors for its projection of health care costs that are higher than they should be based on the facts, resulting in an unfair excessive rate increase for Direct Pay subscribers.

Kilmartin also alleges that Blue Cross is charging administrative costs to Direct Pay subscribers that are excessive and that it is not properly crediting subscribers with cost savings.

Furthermore, Kilmartin alleges that the company's proposed high rates include an inappropriate charge for state assessments and premium taxes.

"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.

"At a time when many employees are forced to pay as much as 20 percent of the total cost of health insurance and for their own long-term disability insurance coverage, Blue Cross should follow suit and tighten its own belt before it asks its subscribers for rate increases."

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