Rhode Island health insurers seek double

Rhode Island's health insurance commissioner is facing an unenviable task this summer: reviewing rate increase requests that, if approved, would deliver some of the steepest premium hikes in the state's history. United Healthcare is seeking a 34.9 percent increase for its large-employer plans, the first time any insurer in the state has requested a hike above 30 percent in a single year. Neighborhood Health Plan is asking for a 24.9 percent average increase for its 34,000 individual marketplace enrollees. Blue Cross Blue Shield of Rhode Island, the state's largest insurer, is requesting a 9.8 percent weighted average increase for its 16,000 exchange participants.

The numbers are staggering, but they're not unique to Rhode Island. Across the country, health insurers are filing double-digit rate increase requests that reflect a perfect storm of rising costs, shifting enrollment patterns, and the expanding footprint of expensive new drugs — particularly GLP-1 medications originally developed for diabetes but now widely prescribed for weight loss.

**The GLP-1 Effect**

The explosive growth of GLP-1 receptor agonists — drugs like Ozempic, Wegovy, Mounjaro, and Zepbound — is one of the biggest drivers of rising insurance costs. Originally approved for Type 2 diabetes, these medications are now prescribed extensively for weight management, a use case that dramatically expands the eligible patient population from millions to tens of millions.

A single GLP-1 prescription can cost $1,000 or more per month without insurance coverage. When millions of people suddenly gain access to these drugs through employer plans and marketplace policies, the aggregate cost is enormous. Rhode Island's insurers explicitly cited "the pervasive use of GLP-1s for weight loss" as a factor in their rate requests, and they're not alone — insurers in California, New York, and Pennsylvania have made similar statements in their 2027 rate filings.

The irony is that GLP-1s may reduce long-term healthcare costs by preventing diabetes, heart disease, and other obesity-related conditions. But insurers operate on annual or biennial rate cycles, and they're bearing the upfront cost of these prescriptions now, without yet seeing the downstream savings. That mismatch is driving premium increases across the board.

**The Exchange Enrollment Crash**

The second major factor is the collapse in HealthSource RI enrollment. When enhanced federal premium subsidies created under the American Rescue Plan expired at the start of 2026, thousands of Rhode Islanders found their monthly costs rising dramatically — and many simply dropped their coverage.

The result is a smaller, sicker, and riskier insurance pool. The people who remain on the exchange tend to be those who need medical care most, while healthier individuals have opted out rather than pay the higher unsubsidized premiums. This adverse selection death spiral is a well-documented phenomenon in insurance economics: as premiums rise to cover the costs of a sicker pool, more healthy people leave, which makes the pool even sicker, which drives premiums even higher.

Rhode Island is hardly alone. State exchanges nationwide are reporting similar enrollment declines following the subsidy expiration, and insurers are responding with the rate increases that this column has been warning about for months.

**The Regulatory Squeeze**

Rhode Island Health Insurance Commissioner Patrick King is caught between competing mandates. State law requires him to guard the solvency of insurance companies — which depends on adequate premiums — while also prohibiting him from approving rate increases that are not in the public interest.

"As much as I'd love to just not give rate increases this year, we have to look at the data," King said. "We can't make an arbitrary decision that would not stand up to judicial scrutiny."

Attorney General Peter Neronha has pushed back, hiring Brown University health policy economist Christopher Whaley to testify against the increases for the second consecutive year. But even Whaley's expert analysis may not be enough to overcome the actuarial reality: medical costs are rising, prescription drug costs are rising faster, and the exchange enrollment pool is deteriorating.

Two provisions in Rhode Island's newly approved fiscal 2027 budget may offer some relief: a $22 million state earmark for HealthSource RI participants and the repeal of a $4 per-person monthly premium assessment fee. But King estimated the fee repeal will shave only 0.4 percent off requested increases — a rounding error when United Healthcare is asking for nearly 35 percent.

**What This Means For You**

If you get health insurance through your employer or a state exchange, expect your premiums to go up — potentially significantly — next year. Rhode Island's situation is a bellwether, not an outlier. The same forces driving these increases (GLP-1 costs, subsidy expirations, adverse selection) are at work in every state.

If you're on a marketplace plan and your subsidy has expired or shrunk, shop carefully during open enrollment. Different insurers are requesting different increases, and the spread can be substantial — Blue Cross' 12.2 percent large-group request is a third of United Healthcare's 34.9 percent. Your specific situation may vary, but comparison shopping is essential.

For policymakers, the lesson is clear: enhanced subsidies worked. They drove enrollment, stabilized risk pools, and kept premiums manageable. Their expiration is now threatening to undo those gains. Whether Congress acts to restore them — and whether states can find alternative funding — will determine whether the current spike is a temporary disruption or the beginning of a sustained affordability crisis.