Blue Cross & Blue Shield of Rhode Island won’t withdraw its proposed double-digit rate hikes, as requested by state Health Insurance Commissioner Christopher F. Koller, which means the request will now be aired at a formal rate hearing.

The nonprofit insurer notified Koller on Thursday that it is still seeking to raise its rates — an average of 13.9 percent for small employers and 16.3 percent for large employers — beginning Oct. 1.

“We understand that many of our members are suffering in the current economic conditions, but the fact is that rising medical costs and increased utilization of services are climbing faster than our rates,” James E. Purcell, president and CEO, said in a statement. “Quite frankly, the OHIC [Office of the Health Insurance Commissioner] is putting the state’s oldest nonprofit health insurer at financial risk by denying our filing. We simply cannot afford to lose $125 million.”

Koller also rebuffed rate hikes sought by UnitedHealthCare of New England and Tufts Health Plan and asked the companies to withdraw their requests. Neither has stated its intentions, said John A. Cogan, legal counsel for Koller’s office. One of the insurers did ask for an extension of Friday’s deadline to respond. As a result, said Cogan, the deadline was extended to Thursday.

Koller, in asking the insurers to withdraw their requests, said that if he didn’t receive any response he would proceed with the formal rate hearing required under state law. It must begin by July 14.

Now, in response to the notice served by Blue Cross, the commissioner’s office will review a list of private-practice lawyers it has compiled and select one to serve as the hearing officer for the quasi-judicial proceedings, Cogan said. That decision will be announced Monday.

Cogan said it would be premature to speculate on whether separate or combined proceedings would be held if either of the other two insurers’ requests for rate hikes goes to a rate hearing.

The parties at a rate hearing include the insurers and representatives of the state attorney general. Each may introduce evidence and call and cross-examine witnesses. The participating insurers must pay for the hearing, including the expense of the hearing officer, a court reporter and any expert witnesses.

At the conclusion, a hearing officer makes a recommendation and submits it to the health insurance commissioner. The commissioner makes a final decision based on the recommendation. His decision may be appealed in Superior Court.

In rejecting the rate-hike requests he received in the spring, Koller said they were “unjustified” based on the documents they submitted to him.

“Rhode Island employers and employees have reached a tipping point with respect to their ability to pay for health insurance. We are in a crisis,” he said. “If accepted, [the rates] would only exacerbate the current cost spiral by further raising business costs. This is simply not acceptable.”

Purcell, in his statement, defended the rate hikes. He said Blue Cross had cut operating expenses, including eliminating 79 positions, renegotiating vendor contracts and freezing employee salaries. He said the company’s “much-contested new headquarters” will actually save $25 million over the long-term.

“Unfortunately, it is not administrative expenses, but medical costs that are the primary drivers of rate increases and which necessitate our rate filing at this time,” Purcell said.

United is seeking increases of 11.6 percent for small employers and 13.2 percent for large employers, according to figures provided by the commissioner’s office. No comparable figures for Tufts were available because the company did not participate in rate hike requests a year ago. Tufts only entered the Rhode Island market last fall.

rsalit@projo.com