PROVIDENCE, RI – A new study from the Rhode Island Health Insurance Commissioner finds that healthcare costs in the state are rising at 7.2% annually, nearly double the national average of 3.8%, placing a growing burden on families and businesses that is threatening the state's economic competitiveness.

The study, which analyzed claims data from the state's major health insurers, found that the cost of healthcare in Rhode Island is being driven by a combination of factors including high hospital prices, increasing utilization of expensive specialty care, and the administrative costs associated with the state's complex insurance regulatory environment.

"Rhode Island families are paying more for healthcare than they should be," said Health Insurance Commissioner Cory King. "We need to address the underlying drivers of cost growth to make healthcare more affordable."

The rising costs are being felt most acutely by small businesses, which lack the bargaining power of large employers and are often forced to pass increasing premium costs on to their employees. A survey of Rhode Island small businesses found that 42% had reduced employee health benefits in the past two years due to rising costs.

"I want to provide good health benefits for my employees, but the costs are just out of control," said one Cranston small business owner. "I'm paying $800 a month per employee for health insurance."

Conservative policy analysts argue that Rhode Island's heavy regulation of the health insurance market is a primary driver of high costs. The state mandates coverage for dozens of services and procedures that are not required in other states.

"Every mandate adds cost," said Mike Stenhouse of the Rhode Island Center for Freedom and Prosperity. "Rhode Island has some of the most extensive insurance mandates in the country, and Rhode Island families pay the price."