RI Health Care Costs Among Highest for Employers

Published 03/26/2024

WAKEFIELD, RI – March 26, 2024 – Rhode Island costs for commercial health insurance premiums paid by families, employers and other purchasers are among the highest in the nation according to a new report from the Rhode Island Business Group on Health (RIBGH).

The report shows that from 2012 to 2022, the cost of commercial health insurance premiums in the state rose from 23% to 28% of median household income. Over those same years, what families paid for commercial health insurance premiums rose from being the 14th most expensive in the nation to 13th most costly.

Although many factors contributed to the rising cost of these premiums in this period, hospitals represented the most substantial medical expense that commercial health insurance premiums cover – by a significant margin. Given the magnitude of these expenses and impact on commercial health insurance premiums, hospitals emerge as one of the primary focal points for exploring opportunities to align hospital operations and payment with affordability and efficiency.

“The unsustainable trend of higher commercial health insurance premiums will continue unless all parties paying for and delivering health care take decisive action now,” said Al Charbonneau, RIBGH executive director. “Failing to act means Rhode Island employers and working families will continue reeling from unrestrained commercial health insurance premiums.”

Any efforts to reduce the cost of commercial health insurance premiums in Rhode Island requires an understanding of the most significant factors that drive up premium rates every year. The three most significant expenses commercial health insurers cover are:

  • State taxes, fees, and assessments
  • Commercial health insurers’ own operating costs
  • Medical care that all premiums cover, including all costs for hospital care, specialty physicians, and prescription drugs

The report is the first in a series of issue briefs that RIBGH will produce in the coming months to identify the primary drivers behind the rise in commercial health insurance premiums in recent years and offer solutions to overcome. Subsequent research will provide a more detailed analysis of the data and other factors that contribute to rising commercial health insurance and health care costs to serve as a guide toward making health insurance more affordable.

RIBGH gratefully acknowledges support of its hospital transparency and payment reform initiative from Arnold Ventures LLC, a philanthropy dedicated to tackling some of the most pressing problems in the United States including high health care costs.

About Rhode Island Business Group on Health:

Rhode Island Business Group on Health (RIBGH) is a nonprofit association that is the leading voice of business on health care in Rhode Island. RIBGH advocates on behalf of its membership and the community for a more affordable, efficient, and higher quality health care system serving the state. Learn more: ribgh.org