Last week, the state of Massachusetts rejected 235 of 274 premium hikes proposed by insurers operating in the state. Bear in mind that Massachusetts has the highest insurance premiums in the country, and not coincidentally it also has a state insurance plan that the White House has repeatedly boasted is similar to the national plan that Democrats just passed. The Massachusetts health care plan has failed to reduce costs even as it has dramatically expanded coverage through taxpayer subsidies, so now the state has resorted to straight-up price controls. Now the insurers in the state are suing:
A half-dozen health insurers yesterday filed a lawsuit against the state seeking to reverse last week’s decision by the insurance commissioner to block double-digit premium increases — a ruling they say could leave them with hundreds of millions in losses this year.
The proposed rate hikes would have taken effect April 1 for plans covering thousands of small businesses and individuals. Insurers wanted to raise base rates an average of 8 percent to 32 percent; tacked on to that are often additional costs calculated according to factors such as the size and age of the workforce.
Yesterday’s legal action sets the stage for a showdown between state regulators and the health insurance industry.
Governor Deval Patrick has made reining in runaway health care costs a centerpiece of his administration and his campaign for reelection — contending they are stifling the capacity of small businesses to create jobs. At the same time, health insurers argue that government is forcing them to sell policies at a loss that is unsustainable as the costs of medical services climb.
Filing the suit were Blue Cross and Blue Shield of Massachusetts, the state’s largest health insurer, and the five commercial members of the Massachusetts Association of Health Plans: Harvard Pilgrim Health Care, Tufts Health Plan, Fallon Community Health Plan, Health New England, and Neighborhood Health Plan. All are nonprofit carriers.
The proposed rate hikes would have taken effect April 1 for plans covering thousands of small businesses and individuals. Insurers wanted to raise base rates an average of 8 percent to 32 percent; tacked on to that are often additional costs calculated according to factors such as the size and age of the workforce.
Yesterday’s legal action sets the stage for a showdown between state regulators and the health insurance industry.
Governor Deval Patrick has made reining in runaway health care costs a centerpiece of his administration and his campaign for reelection — contending they are stifling the capacity of small businesses to create jobs. At the same time, health insurers argue that government is forcing them to sell policies at a loss that is unsustainable as the costs of medical services climb.
Filing the suit were Blue Cross and Blue Shield of Massachusetts, the state’s largest health insurer, and the five commercial members of the Massachusetts Association of Health Plans: Harvard Pilgrim Health Care, Tufts Health Plan, Fallon Community Health Plan, Health New England, and Neighborhood Health Plan. All are nonprofit carriers.
Get ready to see this kind of fiasco at the national level when Obamacare fails to control costs.
