Governor Deval Patrick Denying Insurance Company Rate Hike Requests

When Massachusetts decided to mandate all residents to purchase health insurance it decided to deal with the increasing cost of care at a later date. The cost of care has gone up and insurers are raising rates to keep pace. Rates are putting pressure on subscribers who have little say in what they are charged per month. But insurance companies cannot raise rates without state approval, and the Patrick administration has recently rejected 235 of 274 requests for premium hikes, calling them "excessive."

Some of the premium increases were double-digit hikes. Small businesses that drive the Massachusetts economy feel the pinch, especially in a down economy. Critics of Deval Patrick call his move political, and that blaming insurance companies for high premiums is not getting at the heart of the problem.

Barbara Anthony and Lora Pellegrini went on the Emily Rooney show on April 6th to debate the issue. Anthony is the undersecretary of state for the mass office of consumer affairs and business regulation. Her concern was that insurers were not raising rates to keep pace with the cost of care, but were doing it to maintain high returns for investors who expect profits from these companies. She was also asked what would happen if an insurer was mismanaged, how premium increases could be used to subsidize poor management.

Pellegrini, president of the massachusetts association of health plans, came at the problem from a different, more sensible angle. She said rather than blame insurance companies for the cause of high health care prices, hospital networks and providers should be scrutinized for the way they move into suburbs, monopolize services, then charge Boston rates. Providers can bill insurance companies whatever they want, and if the companies refuse to pay, subscribers get angry because it would reduce their choice of doctors and hospitals.

This is one of the huge problems we may face on a national scale with the new mandate to buy health insurance as stated in Obama's health care reform bill. When the government subsidizes care and mandates all people be covered it also has some say about the prices insurers are allowed to charge.
Sent from my Verizon Wireless BlackBerry