In a decision issued today, Rhode Island's Health Insurance Commissioner denied a rate increase requested by Blue Cross & Blue Shield of Rhode Island for its Direct Pay subscribers. Direct Pay is Blue Cross' health insurance product for the individual market.
The requested rate increase, averaging 5.9%, would have been effective for all new and renewal coverage beginning April 1, 2009. In his ruling, the Commissioner cited two reasons for the denial. First, the Commissioner determined that Blue Cross should not be asking Direct Pay subscribers to make a contribution to Blue Cross' surplus, which now stands at $444 million. Second, the Commissioner found that favorable enrollment trends among healthy subscribers have driven down the costs of Direct Pay, thereby negating the need for a rate increase.
Among this year's large rate increases on the individual market:
• Anthem Blue Cross in California has notified about 80% of its 800,000 individual policyholders of double-digit increases, many above 30%. Spokesman Ben Singer says rising medical costs are prompting the increases.
• Blue Cross of Michigan is seeking state approval for a 56% increase in individual premiums. Spokesman Andy Hetzel says the company needs to offset losses stemming from state rules making it the sole insurer required to take all applicants.
• Regence Blue Cross Blue Shield of Oregon will raise rates for approximately 10,000 Washington state customers by 27.1% on March 1.
Another Washington insurer, LifeWise, raised rates 17.6% on Jan. 1, according to the Office of the Insurance Commissioner in Washington state.
