Media Release

Date: September 23, 2005
Contact: Christopher F. Koller, RI Health Insurance Commissioner 222-5426

Director of Health and Health Insurance Commissioner Issue Analysis of RI Health Insurers’ Finances

Today, the Rhode Island Department of Health (HEALTH) and the Office of the Health Insurance Commissioner released the Health of Rhode Island’s Health Insurers (2004) , a financial performance report on the three health insurers domiciled in the state. These include Blue Cross of Rhode Island, UnitedHealthcare of New England and Neighborhood Health Plan.

The Report finds that, compared to their national counterparts in 2004, Rhode Island health insurers on a statewide basis: were less profitable, increased their net worth at a slower pace, maintained smaller reserves relative to revenues, operated with the same efficiency, but spent more on healthcare services.

“ Health Insurers in RI continue to be under great public scrutiny,” said Christopher F. Koller, Health Insurance Commissioner. “This report indicates that while all RI health insurers are financially stable, their financial trends have been consistent with or slightly trail their national counterparts. What is equally important to note,” he continued “is that these averages contain significant variations among the plans in the various performance measures- such as administrative ratio and medical loss ratio - reflecting fundamental differences in their ownership priorities and business models . There are real policy implications to these differences.”

The Department of Health compiled this report as part of its statutorily mandated health plan performance reporting program. “In Rhode Island, “ said Director David Gifford MD, MPH “health plans must demonstrate their performance on quality, utilization and financial measures. This public accountability is important to maintaining consumer trust.”

The Report is available on HEALTH’s website. The report uses statutory data (information the health insurers are required to file annually with the state) to examine eight financial measures in four general categories (profitability, liquidity, reserves and efficiency). All of these measures were trended with three years of data, and benchmarked to the national and regional experience to gauge RI’s performance.

Author Bruce Cryan in HEALTH's Center for Health Data & Analysis notes that this Report complements other annual reporting on the state’s health insurers (i.e., “The RI Commercial Health Plans’ Performance Report”). That publication analyzes other aspects of performance, notably, enrollment, utilization, clinical measures, access, satisfaction and utilization review.